Ethereum Faces Market Challenges As $40 Million ETH Transferred to Exchanges

Ethereum experiences a critical market downturn, with major firms transferring over $40 million in ETH to exchanges. The price has fallen below the $1,600 support level, raising concerns of further declines. Total value locked in Ethereum has dropped substantially, and competing networks are outperforming Ethereum, exacerbating bearish sentiment. Recent ETF outflows further strain the network’s performance, contributing to a challenging recovery ahead.

Ethereum’s market stability is under significant threat as three notable investment firms have transferred over $40 million in ETH to exchanges within a continuous 24-hour period. Reported data from on-chain analyst The Data Nerd indicates that Polychain Capital deposited approximately 5,700 ETH valued at $9.2 million, Galaxy Digital moved 12,500 ETH, around $20.3 million, and B2C2 added a further 6,540 ETH worth about $10.7 million.

The timing of these movements is crucial, as Ethereum has fallen below the $1,600 threshold, a vital support level which has now transitioned into a resistance zone. Various moving averages, from short-term to long-term, indicate sell signals, while the relative strength index (RSI) is at 38.9, suggesting weak momentum but lacking oversold conditions. Although the moving average convergence/divergence (MACD) hints at a potential short-term recovery, the market sentiment remains cautious.

Should Ethereum fail to reclaim the $1,600–$1,620 range promptly, it might face further declines towards $1,500 or even $1,450. Conversely, a potential rebound could lead to a rapid relief rally towards $1,700, but significant resistance is anticipated at that level.

Additional on-chain data contributes to the negative outlook, showing Ethereum’s total value locked has diminished from approximately $70 billion at the beginning of the year to $46 billion currently. Monthly revenue has dramatically decreased from $109 million in January to merely $7.2 million in March, indicating severe downturns in economic activity on the network.

Ethereum is also losing traction against competitors such as Solana (SOL), Base, and Tron (TRX), which are currently attracting more users and revenue, while decentralised applications like Uniswap (UNI) experience better performance across rival platforms.

Furthermore, U.S. spot ETF outflows are compounding worries; ETH ETFs reported $14 million in withdrawals on April 15, contributing to total outflows of $158 million in the previous month, as per SoSoValue’s data. In the first quarter of 2025, Ether suffered a 45% decline, marking its third-worst quarterly performance since 2016, with significant sell-offs and deteriorating fundamentals indicating that Ethereum’s recovery path remains daunting.