Ethereum is currently facing some short-term selling pressure, but the long-term outlook remains rather optimistic according to several indicators. The feeling around ETH has been rather quiet over the past two weeks following the massive and brutal sell-off on October 10.
Derivatives data shows open interest is around $19-20 billion, up from $27 billion before the liquidation. This is actually a relatively unlevered market, which generally signals a short-term downtrend. Funding rates have been barely positive and even briefly fell negative over the past two weeks.
What is concerning is the NetFlow data exchange. On October 15, the 7-day moving average showed massive outflows of -31,000 ETH, signifying strong accumulation. But now it has risen to more than 3,000 entries, highlighting selling pressure even as prices fall. Until this trend reverses, traders should be wary of further declines.
There is, however, a glimmer of hope. Ethereum is still trading well above its fundamental support level, price realized at $2,300. Falls below this figure generally signal capitulation and bear markets. THE MVRV report stands at 1.67, meaning holders are currently making an average of 67% in profits.
Holders are therefore profitable but not overheated, and the market is not euphoric. This is actually a healthy combination for bulls in the medium term. More gains could follow this consolidation phase, especially with the announcement that T. Rowe Price’s new multi-coin ETF will likely include Ethereum.
Conclusion
Ethereum faces near-term selling pressure as exchange flows increase, but the MVRV at 1.67 and trading above the $2,300 realized price suggests a healthy long-term bullish outlook remains intact.
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