Ethereum’s weak average returns since September have investors cautious amid ETF outflows

• Ethereum’s negative average returns in September could see the top altcoin post another month of losses.
• U.S. commodities spark another week of net outflows for Ethereum ETFs.
• Ethereum price must move outside of a key rectangle to determine the next trend.

Ethereum (ETH) rose 2% on Monday despite negative sentiment surrounding ETH’s historically weak price action since September. Meanwhile, ETH ETFs continue their weak trend with another week of net outflows.

Daily Market Reasons: Ethereum Weak September Returns, ETH ETF Exits

Several market participants are anticipating that Ethereum could see further lows in September due to its historically negative average return this month. Since the ICO boom of 2017, ETH has only seen an average positive return in September in 2019, according to Coinglass data.

With an average and median return of -6.8% and -12.6% respectively, investor sentiment during the month is slightly negative. This also follows ETH which ended August with an average loss of 22%.

Monthly Ethereum Returns (%)

On the other hand, some investors anticipate that a potential interest rate cut by the Federal Reserve (Fed) will help ETH stage a rally in September.

Meanwhile, CoinShares reported that global Ethereum exchange-traded funds (ETFs) saw net outflows of $5.7 million last week, indicating risk aversion among investors due to volatile price action. In particular, negative flows were driven by US Ethereum spot ETFs, which saw a total net outflow of $12.4 million, following zero flows across the nine issuers, including BlackRock’s ETHA and Grayscale’s ETHE .

Despite weak flows, three Ethereum ETFs are among the top 25 ETFs to launch in 2024: BlackRock’s ETHA, Fidelity’s FETH, and Bitwise’s ETHW.

ETH Technical Analysis: Ethereum Maintains Consolidation in Key Rectangle

Ethereum is trading around $2,520 on Monday, up more than 2% on the day. Over the past 24 hours, ETH has seen liquidations of $38.49 million, with long and short liquidations accounting for $27.59 million and $10.9 million, respectively.

On the four-hour chart, ETH is consolidating in a key rectangle with resistance at $2,817 and support at $2,400. ETH bounced back from the support level on Sunday, extending its time in the rectangle to 25 days.

ETH/USDT 4 Hour Chart

The next indication of the ETH price trend will likely be a move out of the rectangle. A break above the $2,817 resistance will turn it into a support and help ETH rise towards the $3,237 level. It is important to note that the $2,817 level held as support for almost four months — April to July 2024. The 200-day, 100-day, and 50-day simple moving averages (SMAs) also represent a potential increasing resistance.

However, a move below the $2,400 level could trigger a bearish push and send ETH towards the support level around $2,111.

The Relative Strength Index (RSI) is attempting a move above the median line after breaking above the moving average line on the 4-hour chart. The %K line of the Stochastic Oscillator (Stoch) has entered the oversold region, indicating that prices may see a downward correction.

A daily close of the candle below $2,111 may signal the end of the current bull cycle.

In the short term, ETH could drop to $2,416 to de-leverage over $32.47 million.