- Spot flows, including ETFs, turned negative, erasing recent gains.
- Why there has been a recent short-term shakedown and what’s next if whales make a comeback.
An unexpected wave of selling pressure has wiped out Ethereum’s recent gains [ETH] reached in the first few days of January.
There were multiple reasons behind the selling pressure, including leverage and spot outflows, among others.
ETH spot ETF outflows were perhaps the most notable sign of selling pressure. It initially started this week with an inflow worth $128.7 million on January 6, building on the January 3 inflow.
This may have created a false sense of relief, and resulted in a FUD-filled sell-off after the ETFs turned around on January 7.
In contrast, Bitcoin ETFs were still positive over the past 24 hours, despite the opposite result on ETH’s side. This was a reflection of the dominance situation.
ETH ETF outflows amounted to $86.8 million on January 7. This matched the total negative cash flows seen on the stock exchanges over the same period. Outflows peaked at $235.66 million on this date.
Source: Coinglass
ETH dominance is falling, but could be ready to reverse
The recent selling pressure has negatively impacted ETH’s dominance, which rose to 12.87% earlier over the weekend. However, the latest turn of events meant that the interest rate was only 12.32%.
ETH could make another attempt to achieve higher dominance from its current levels. This is because the same zone previously expressed support.
Source: TradingView
The same ETH dominance support also matches the support retest on ETH price action. But is the latest pullback over, or will the price drop be even lower?
Long leveraged liquidations likely played a role in the latest wave of selling pressure seen over the past two days.
Interest in leverage has increased in recent months. The number of long liquidations has increased by more than 700% since January 3.
Source: CryptoQuant
More than $173 million in liquidations have been observed in the past 24 hours. This suggests that the latest rally in the first week of January may have been a preparation for a leverage shakedown.
Will ETH recover in the second half of the week? This is plausible because of one key observation that may provide insight into the next step. Whales have been sold since early January.
Read Ethereum’s [ETH] Price forecast 2025–2026
However, recent data shows that these have piled up during the last dip.
Source: IntoTheBlock
ETH whales collected 519,620 ETH on January 7, while the outflow on the same day was lower at 411,300 ETH. This confirmed that whales have bought the dip and could potentially help with a mid-week recovery.
