Why is ETH falling?

The inflation shock is the sharpest trigger

October consumer prices rose 0.4% month over month, above the 0.3% forecast. Core inflation came in at 0.3%, above the 0.2% expected, raising the prospect that the Federal Reserve could keep rates restrictive or hike again. Higher rates are bad for crypto the same way they are bad for growth stocks: when you can earn a solid, guaranteed return in cash, the case for holding a volatile asset weakens. As the last inflation reading the Fed sees before its December 9 rate decision, the numbers strengthened market expectations of a rate hike. Fed hike odds for December reached 90.5%.

Six straight weeks of ETF outflows

Spot ETH ETFs are exchange-traded funds that hold actual Ethereum and let institutions buy exposure through a brokerage account, the same way they would buy a stock. When those funds see outflows, it means institutional money is walking out the door. US spot ETH ETFs had $184.5 million in net outflows in a single day, the largest daily total since early October. That marked 3 straight days of outflows, and 6 straight weeks of net outflows for the products overall. Ethereum ETFs lost $365.3 million in one week alone, bringing cumulative outflows since late September to about $2.02 billion.

Liquidations make the drop worse

Liquidations happen when traders borrow money to bet on a price going up (a "long" position) and the price drops far enough that the exchange automatically closes their bet at a loss. That forced selling pushes the price lower, which triggers the next wave. Liquidations across ETH futures reached $254.8 million, driven by $193.3 million in liquidated long positions. Ethereum also dropped more than 7% on November 5, when about $164.72 million in ETH positions were liquidated, so this is a pattern that has repeated for days now.

Where the chart sits

Ether has slid about 20% in a month. It closed at $2,051 after trading as low as $2,002, its weakest price in 60 completed daily sessions. Support near $1,850 may decide whether the slide stays orderly. One note of caution on the downside: ETF selling dropped by 99% in the most recent session, suggesting institutional sellers may be exhausted right as Ethereum tests its heavily defended $2,000 floor.