Ethereum slips below $2,400 as Oil surges, ETF outflows mount

• Ethereum faces selling pressure near $2,400 as Oil prices rise.
• Ethereum exchange reserves climb by 290K ETH while ETFs are on track for two weeks of outflows.
• ETH tests the $2,411 support after rejection at the 50-day EMA.

Ethereum (ETH) declined 1% on Friday, briefly dropping below $2,400 following rising Oil prices.

Brent Crude has jumped 3.6% to 109.7 at the time of writing, reaching its highest level since May. The spike in Oil prices has pressured risk assets, with cryptos declining alongside equities, highlighting increasing correlation between the two asset classes.

The crypto market is down 1.3% while the S&P 500 has dropped by 1.4%, eyeing its lowest close since mid-September. The tech-heavy Nasdaq bore most of the brunt, sliding by 2.3% amid selloffs in AI-related stocks.

The drop follows hot wholesale and consumer inflation readings over the past two days, fueled by rising energy prices. The Producer Price Index (PPI) and Consumer Price Index (CPI) both beat market forecasts in September, coming in at 6.3% and 3.7% YoY versus estimates of 5.3% and 3.6%, respectively.

ETH selloff increases following rising exchange reserves and ETF outflows

Ethereum continues to face liquidation pressure, with $72 million wiped off the market, based on data from exchanges tracked by Coinglass. Long traders in ETH futures have now recorded roughly 500 million in liquidations since Monday.

The pressure is more evident on the spot side. Ethereum exchange reserves, which track the total amount of a crypto asset held across exchange wallets, have increased by about 290K ETH over the past three weeks, their highest since September 10. That suggests rising sell-side pressure, as shown by ETH's decline.

US spot ETH exchange-traded funds (ETFs) tell the same story, posting net outflows of $60.2 million on Thursday, per SoSoValue data. The products are on track for a second consecutive week of net outflows after recording withdrawals in 12 out of the last 13 trading days.

Ethereum technical outlook: ETH tests $2,411 support

On the daily chart, ETH is keeping a bearish near-term tone as price has slipped below the 50-day and 20-day Exponential Moving Averages (EMAs) at $2,492 and $2,538, respectively. The top altcoin holds above the 100-day EMA at $2,347.87, which offers tentative trend support, but the failure to sustain above the shorter EMAs hints at waning bullish control.

The 14-day Relative Strength Index (RSI) at 38 and the Stochastic Oscillator (Stoch) near 23 lean toward bearish momentum.

On the downside, immediate support is near the latest close around $2,414, followed by the nearby horizontal floor at $2,355 and the 100-day EMA. A decisive break below this area could open the way toward deeper supports at $2,204 and $1,971.

On the topside, initial resistance emerges at the 50-day EMA, ahead of the horizontal barrier at $2,548 and the 20-day EMA, forming a dense supply zone, with further upside hurdles at $2,636 and $2,781.

(The technical analysis of this story was written with the help of an AI tool. Know more.)