Ethereum briefly fell to around $1,505 on June 6 before recovering to around $1,540, with a cumulative weekly decline of approximately 23%. This drop occurred amid a general weakening of the crypto market, with concentrated liquidation of long positions, continued outflows from the US spot Ethereum ETF, and a tightening macroeconomic environment all contributing to the downward pressure on risk assets.
Long positions being liquidated amplified the decline.
Selling pressure accelerated significantly after Bitcoin briefly dipped below $60,000. Derivatives data shows that approximately 78.7% of recent liquidations came from long positions, and Ethereum open interest also declined by nearly 30%, indicating a rapid contraction in leveraged bullish bets.
This means that short-term funds are withdrawing, and price fluctuations are driven more by passive liquidation than by new selling pressure. As ETH broke through several previous support levels, market sentiment weakened further.
Continued outflows from ETFs weaken spot demand
The liquidity situation has also not improved. SoSoValue data shows that the US spot Ethereum ETF saw a net outflow of approximately $540 million in May, followed by another outflow of approximately $168 million in early June. Continued redemptions have weakened a significant source of buying interest in the spot market.
Besides ETFs, on-chain activity is also declining. The report mentions that Ethereum network fees have fallen by about 45% from recent highs, with some large holders continuing to reduce their positions during this downturn, and speculative demand in the DeFi and derivatives markets also cooling down.
Macroeconomic pressure and support levels
Macroeconomic factors further dampened risk appetite. Stronger-than-expected US jobs data weakened market expectations for a Federal Reserve rate cut; meanwhile, military tensions between the US and Iran pushed up oil prices, with Brent crude briefly approaching $97 a barrel, fueling inflation concerns.
Against this backdrop, some funds are shifting towards defensive assets and large-cap tech stocks, rather than crypto assets. Polymarket data shows that traders recently estimate the probability of the Federal Reserve not cutting interest rates for the remainder of 2026 at approximately 82.2%.
From a technical perspective, ETH has broken below the upward trendline that has supported multiple rebounds since February. The report cites analysts who say that $1550 and $1400 are currently key support levels; if $1400 is breached, the $1000 to $1100 range could become the next historical demand zone.
The article also estimates that if the decline continues, approximately $547 million in positions in the DeFi lending market may face liquidation, potentially amplifying selling pressure. Regarding market sentiment, the crypto fear and greed index has dropped to 11, placing it in the "extreme fear" range.
