Ethereum (ETH) is closing December on a weak note, with price action and market data flashing caution signs for traders and investors alike. The world’s second-largest cryptocurrency has dropped nearly 14% over the month, pressured by heavy ETF outflows, soft derivatives demand, and a broader risk-off mood across financial markets.
According to data from crypto.news, Ethereum has fallen from its December peak of $3,432 to just under $3,000 at the time of writing. While the monthly decline is notable on its own, the bigger picture looks even more challenging. ETH is now trading almost 40% below its all-time high of $4,946, highlighting how far the asset remains from its previous peak.
One of the key drivers behind Ethereum’s recent weakness has been fading institutional interest. Data from SoSoValue shows that U.S. spot Ethereum exchange-traded funds recorded nearly $545 million in net outflows during December. This follows an even steeper withdrawal in November, when around $1.42 billion exited these products. Sustained ETF outflows often signal declining confidence from larger investors, a trend that can spill over into retail sentiment.
Derivatives data paints a similarly muted picture. CoinGlass reports that Ethereum futures open interest has hovered between $35 billion and $40 billion for months, well below the $70 billion level seen in August. Lower open interest suggests traders are closing positions and showing less appetite to speculate, which can reduce volatility but also limit upside momentum.
Macro conditions have added further pressure. A cautious, risk-averse tone has dominated markets as investors react to the U.S. Federal Reserve’s hawkish stance heading toward 2026. In such environments, risk assets like cryptocurrencies often struggle as capital flows into safer alternatives. Reflecting this mood, the Crypto Fear and Greed Index stood at 21 at press time, signaling “extreme fear” that has persisted for much of December.
From a technical perspective, Ethereum’s chart is raising red flags. On the daily timeframe, ETH appears to be forming a bearish pennant — a pattern that typically emerges after a sharp decline and often points to continuation lower if confirmed. Momentum indicators are also leaning negative. The 50-day simple moving average has slipped below the 200-day average, forming a so-called death cross, a signal many traders view as bearish.
ETH is also trading below its 50-day moving average, suggesting sellers remain in control. Meanwhile, the Supertrend indicator has turned red and moved above the current price, a development often interpreted as a sell or short signal.
If the bearish pennant plays out, Ethereum could revisit its Nov. 21 low near $2,622, especially given the lack of strong support levels between current prices and that zone. However, the outlook isn’t entirely one-sided. A decisive move above the psychological $3,100 level would invalidate the bearish setup and could spark a short-term recovery, offering bulls a chance to regain momentum.
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