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Ethereum extended its recent selloff on Wednesday, raising concerns that further downside could be ahead as derivatives data and technical indicators point to weakening demand. Analysts warn that ETH could be at risk of a 30% decline if key support levels fail to hold.
Ethereum Slides Amid Weak Market Conditions
ETH fell 3.3% to around $1,950, marking its fourth consecutive week in the red. The broader crypto market remains under pressure as stronger-than-expected U.S. jobs data dampened expectations of near-term Federal Reserve rate cuts.
With the U.S. economy adding 130,000 jobs in January and unemployment falling to 4.3%, traders have reduced bets on monetary easing , a development that has weighed on risk assets, including crypto.
Ethereum is now down more than 60% from its all-time high, reflecting the intensity of the ongoing crypto winter.
Futures Open Interest Hits Multi-Month Low
One of the biggest warning signs for Ethereum is the sharp drop in futures open interest.
Data from derivatives markets shows that ETH futures open interest has fallen to approximately $23 billion , the lowest level in nine months. At its 2025 peak, open interest exceeded $70 billion.
Open interest is widely viewed as a measure of leverage and market participation. A declining figure suggests that traders are closing positions and reducing risk exposure.
Historically, falling open interest during a price decline often signals continued downside momentum rather than accumulation.
Funding Rates Turn Negative
Further reinforcing the bearish outlook, Ethereum’s weighted funding rate has slipped into negative territory at -0.0067%, its lowest level in days.
Funding rates in perpetual futures markets represent the fee paid between long and short traders. A negative funding rate typically indicates that short sellers are dominant and that market participants expect lower prices ahead.
ETF Outflows Add Pressure
Institutional demand also appears to be weakening. Ethereum-related exchange-traded funds (ETFs) have reportedly recorded over $94 million in net outflows this month, marking the fourth consecutive month of withdrawals.
The consistent outflows suggest cautious positioning among larger investors amid ongoing volatility.
Technical Breakdown Signals Further Risk
From a technical perspective, Ethereum has broken below a key support level at $2,113, invalidating a previously forming inverted head-and-shoulders pattern , a structure that is typically considered bullish.
Additional indicators reinforce the bearish setup:
ETH is trading below all major moving averages.The Relative Strength Index (RSI) continues trending downward.The Average Directional Index (ADX) is rising, signaling strengthening trend momentum.

If the current downtrend continues, analysts suggest that ETH could target the $1,340 level , roughly 30% below current prices and near its 2025 lows.
However, a move above the $2,200 resistance level would invalidate the bearish scenario and potentially signal a recovery attempt.
Outlook
With leverage declining, funding rates negative, ETF flows weakening and technical support levels breaking, Ethereum faces a critical juncture. Whether buyers step in near current levels or allow the downtrend to deepen may determine the next major move in the market.
For now, the balance of indicators leans bearish as the crypto winter shows few signs of easing.

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