Ethereum price crashes to key support as ETH ETF inflows surge

Ethereum price fell to a critical support level as cryptocurrencies experienced a sharp pullback following the Federal Reserve’s hawkish interest rate announcement.

Ethereum (ETH) is down 10% from its peak earlier this week to $3,540. This pullback coincided with the sell-off of other cryptocurrencies such as Bitcoin (BTC) and Solana (SOL).

Despite the price drop, Ethereum’s fundamentals remain strong. In particular, Ethereum Exchange Traded Funds have seen steady inflows and currently total over $2.46 billion. These inflows have increased for 18 consecutive days, reflecting increased interest from investors.

Ethereum ETFs are gaining traction as investors predict the SEC may soon allow staking within these funds. The lack of staking options at this time may have deterred some institutional investors from fully adopting these ETFs.

Funds from companies such as Grayscale, Blackrock, Fidelity, Bitwise and VanEck are the largest holders of Ethereum.

Meanwhile, the number of ETH coins staked continued to increase. There are currently over 54.7 million ETH tokens staked, supported by a growing base of over 206,000 unique stakers. This trend underscores the long-term bullish trend among investors planning to hedge their ETH positions.

Cumulative ETH sent to staking | Source: IntoTheBlock

Ethereum is still the largest player in the blockchain industry, with the total value locked in the Decentralized Finance ecosystem reaching over $73.7 billion. These funds are much higher than most other chains like Solana, Base, and Arbitrum combined.

ETH pulled back after the Federal Reserve cut interest rates and maintained its hawkish tone. It now expects to cut interest rates twice in 2025 instead of four. Cryptocurrencies and other risk assets perform well when the Fed adopts a dovish tone.

Ethereum price analysis ETH price chart | Source: crypto.news

The daily ETH chart shows a sharp reversal after the price reached a critical resistance level at $4,090. This level corresponds to the highs of December 6 and March 11, as well as the overshoot level at the Murrey Math Lines.

Ethereum formed a bearish double-top formation at this resistance, with the neckline positioned at $3,526. This pattern points to potential further declines as ETH likely tests the major support and resistance pivot point at $3,125. More gains will be confirmed if Ethereum breaks above the $4,090 resistance level.