Why Is Ethereum Dropping? ETF Outflows Add Pressure After Fed Decision

Ethereum is facing renewed selling pressure after falling more than 2% on October 29, 2026, with its price trading around $2,318. The decline comes as US spot Ethereum exchange-traded funds (ETFs) continue to record withdrawals, while broader cryptocurrency markets remain under pressure following the Federal Reserve's latest interest rate decision.

The latest figures show that ETH ETF outflows reached $21.41 million on October 28, marking a third consecutive trading session of net withdrawals. Meanwhile, Ethereum is struggling to reclaim important technical levels, leaving traders uncertain about whether the current decline is a temporary correction or the beginning of a deeper pullback.

So, why is Ethereum dropping, and what should investors watch before expecting a recovery?

Key Takeaways

• Ethereum fell 2.12% to approximately $2,317.78 on October 29, as ETF withdrawals and broader crypto market weakness weighed on sentiment.

• US spot Ethereum ETFs recorded approximately $170.21 million in combined net outflows between October 26 and 28.

• ETH needs to reclaim the $2,400 area to strengthen its recovery outlook, while a break below $2,290 could expose lower support levels.

Why Is Ethereum Dropping?

Ethereum's latest decline reflects several factors rather than one isolated event. Institutional fund withdrawals, bearish technical indicators, selling by large holders, and uncertainty surrounding monetary policy have all contributed to the pressure on ETH.

ETH ETF Outflows Increase Selling Pressure

One of the clearest factors behind the recent decline is the continued withdrawal of capital from US spot Ethereum ETFs.

According to SoSoValue data cited in the October 29 market report, spot ETH ETFs recorded:

• October 26: $88.58 million in net outflows.

• October 27: $60.22 million in net outflows.

• October 28: $21.41 million in net outflows.

Combined, the funds experienced approximately $170.21 million in net withdrawals over three consecutive sessions.

BlackRock's iShares Ethereum Trust (ETHA) was a major contributor to the latest outflows, recording $44.83 million in withdrawals on October 28. Inflows into competing funds offset part of that amount, but were not enough to prevent the overall net outflow.

Persistent ETF withdrawals can weaken market sentiment because they suggest that some institutional investors are reducing their exposure to Ethereum. However, ETF flows do not explain every price movement, and outflows alone do not prove that all institutional investors are bearish.

The latest Ethereum ETF news therefore points to weakening investment demand, although the market will need to see whether this trend continues in the coming sessions.

Federal Reserve Decision Keeps Market Sentiment Cautious

The Federal Reserve's October 28 decision also provides important context for the current market environment.

The central bank kept its target interest rate unchanged at 3.75%–4%. The decision passed by 10 votes to two, with policymakers Lisa Cook and Beth Hammack preferring a quarter-point increase.

Although the Fed did not raise rates, its decision did not provide a clear signal that monetary conditions would become easier soon. The committee also described inflation as elevated.

This matters for cryptocurrency markets because interest rates can influence investors' willingness to hold volatile assets. When returns from lower-risk investments remain relatively attractive, speculative assets such as Ethereum may face additional pressure.

Still, the Fed decision should not be treated as the sole cause of ETH's decline. Its impact is interacting with ETF withdrawals and weakness across the wider crypto market.

Whale Selling Adds Another Layer of Pressure

On-chain activity has also raised concerns about Ethereum's short-term outlook.

Data cited by crypto analyst Ali Martinez, referencing Santiment, indicated that large holders reduced their positions by approximately 160,000 ETH, worth more than $348 million, over several days.

At the same time, Ethereum balances on cryptocurrency exchanges reportedly increased by around 100,000 ETH, valued at approximately $240 million.

An increase in exchange balances can indicate that more ETH is becoming available for potential trading or selling. However, it does not automatically mean that those tokens have already been sold.

The combination of whale distribution and rising exchange balances nevertheless gives traders another reason to monitor selling pressure closely.

ETH Price Analysis: Key Support and Resistance Levels

Ethereum traded around $2,317.78 on October 29 after briefly approaching the $2,300 area. The price has struggled to recover from its late-September high near $2,800, with a series of lower highs indicating that sellers have maintained control.

Technical indicators also show a cautious picture. The daily MACD line stood at -57.69, below its signal line at -51.75, while the histogram remained negative at -5.94. These readings suggest that bearish momentum was still present.

Meanwhile, the Money Flow Index (MFI) recovered to 50.35 after briefly entering oversold territory. This improvement may indicate that selling pressure has eased somewhat, but it does not confirm a trend reversal.

The following levels are worth watching:

Support levels

• 2,290–2,300: The immediate support zone. A sustained breakdown could increase downside pressure.

• $2,200: The next potential support area if sellers push ETH below $2,290.

• $2,100: Another level to monitor if the correction deepens.

Resistance levels

• 2,385–2,400: An important recovery area. Reclaiming this zone could improve short-term sentiment.

• $2,500: A higher resistance level and potential recovery target.

• $2,550: A more substantial resistance area identified in recent analyst commentary.

These levels are reference points, not guaranteed turning points. Price action and trading volume will help determine whether buyers can defend support or overcome resistance.

Ethereum Price Prediction: Can ETH Recover or Fall Further?

The short-term Ethereum price prediction depends largely on whether buyers can defend the 2,290–2,300 support zone and whether ETF flows begin to stabilize.

A bullish scenario would require ETH to hold above immediate support, regain the 2,385–2,400 area, and eventually move toward $2,500. A sustained recovery accompanied by improving ETF flows and stronger spot demand would provide a more convincing sign that buyers are returning.

The bearish scenario becomes more likely if ETH loses the 2,290–2,300 area and fails to recover it. In that case, traders may watch $2,200 and $2,100 as potential downside levels. Continued ETF withdrawals and elevated exchange balances could reinforce selling pressure.

For now, neither scenario is confirmed. The negative MACD suggests that sellers still have an advantage, while the MFI recovery indicates that momentum could change if buyers return.

Can Bitrue AI Help Identify an Ethereum Price Recovery?

Identifying a potential Ethereum recovery requires more than watching its price move above a support level. Traders also need to assess momentum, volatility, market structure, and the possibility that a short-lived rebound could turn into another decline.

Bitrue AI provides an example of how these signals can be organized into a trading strategy. Its ETH/USDT strategy page has displayed a Stable Grid 9x setup designed for a range-bound market, with a strategy range of approximately 2,086.68–2,544.94. The displayed analysis referenced ADX14 at 23, daily RSI14 at 35, and a support area around $2,292.20.

These readings offer useful context when compared with the October 29 market report. ETH was trading near $2,318, close to the support area identified by the strategy. The neutral grid approach reflects an expectation of price fluctuations within a range rather than a confirmed bullish breakout.

What would a bullish scenario look like?

If ETH holds the 2,290–2,300 region, recovers above $2,400, and sees improving momentum, traders could begin evaluating whether the market is shifting toward a recovery. Stronger ETF flows and rising spot demand would provide additional confirmation.

What would a bearish scenario look like?

If ETH breaks below immediate support and continues to show weak momentum, a range-bound strategy may become less suitable. A deeper decline toward $2,200 or $2,100 could challenge the assumptions behind a neutral grid setup.

The strategy's displayed lower and upper boundaries also matter. A move beyond the selected range can reduce the effectiveness of grid trading, while leverage can magnify losses during sharp market movements.

The key distinction is that Bitrue AI's displayed strategy is a real ETH/USDT example, not a forecast that ETH will recover. Its parameters and performance figures can change as market conditions evolve. Backtested results do not guarantee future returns, and leveraged strategies carry liquidation and drawdown risks.

Traders who want to explore AI-assisted crypto strategies can also check out Bitrue AI to discover its available features and market analysis tools. For a closer look at automated trading approaches, the Bitrue AI Strategy page provides access to different strategy options, while the Bitrue AI campaign page offers more information about its ongoing AI-related opportunities. Before using any strategy, take time to review its parameters and potential risks, as AI-generated insights cannot guarantee market movements or trading profits.

Conclusion

Ethereum is dropping as ETF outflows, whale selling, and broader market weakness combine to pressure its price. The Federal Reserve's decision to maintain interest rates at 3.75%–4% has also left investors without a clear signal of easier monetary conditions.

For the short term, 2,290–2,300 remains an important support zone, while $2,400 is a key recovery level. A sustained move above resistance, supported by improving ETF flows and market momentum, could strengthen the bullish case. A breakdown below support would leave ETH vulnerable to further losses.

Traders can monitor these developments alongside technical indicators and AI-assisted strategy analysis. If you want to explore cryptocurrency trading services and available AI tools, consider creating a Bitrue account and reviewing the platform's features before making any trading decisions.

FAQs

Why is Ethereum dropping today?

Ethereum is under pressure from ETF outflows, whale selling, bearish technical indicators, and weakness across the broader crypto market.

How much did Ethereum ETFs lose?

US spot Ethereum ETFs recorded approximately $170.21 million in combined net outflows between October 26 and 28, 2026.

What is Ethereum's current support level?

The immediate support zone identified in the October 29 analysis is around 2,290–2,300.

Can Ethereum recover to $2,500?

A recovery toward $2,500 is possible if ETH reclaims the $2,400 area and buying momentum improves, but this outcome is not confirmed.

Can Bitrue AI predict Ethereum's price?

Bitrue AI provides market analysis and strategy parameters, but it cannot guarantee future ETH prices or trading profits.

Disclaimer: The views expressed belong exclusively to the author and do not reflect the views of this platform. This platform and its affiliates disclaim any responsibility for the accuracy or suitability of the information provided. It is for informational purposes only and not intended as financial or investment advice.