Ethereum tests $1,800 support as ETF outflows mount, can bulls defend it?

Ethereum has slipped to a key support zone near $1,800 as persistent ETF outflows, geopolitical uncertainty, and a bearish technical breakdown keep traders on the defensive.

According to data from crypto.news, Ethereum (ETH) price was trading around $1,875 at press time on June 3 after briefly touching levels just above the $1,800 support area. The token has now erased most of its gains from the April-May recovery and remains under pressure after sellers forced a decisive breakdown below the $2,000 psychological level.

A sustained withdrawal of institutional capital has emerged as one of the main headwinds behind the decline. Data from SoSoValue shows U.S. spot Ethereum ETFs have recorded roughly $845 million in net outflows over the past four weeks, reversing part of the strong accumulation trend seen earlier this year.

Continued redemptions have removed an important source of spot demand at a time when market sentiment has deteriorated across risk assets.

Elsewhere, rising tensions in the Middle East have kept investors cautious. Reports of stalled diplomatic negotiations between the United States and Iran have contributed to a sharp rise in crude oil prices, reviving inflation concerns across global markets.

Higher energy costs have also complicated expectations for monetary easing, with traders increasingly questioning whether the Federal Reserve will have room to cut rates in the coming months.

Ethereum breaks below descending channel support

Ethereum’s technical structure deteriorated further after ETH price fell out of a descending parallel channel that had guided the market lower since early May.

The daily chart shows ETH breaking beneath the lower boundary of that channel before finding temporary support near $1,800. The level carries additional significance because it aligns closely with a horizontal support zone that has repeatedly attracted buyers since February.

If Ethereum price fails to defend that area, it could expose the February low near $1,750 and potentially open the path toward the $1,600 region.

Looking at momentum indicators, the daily MACD remains below its signal line, while the histogram stays in negative territory despite a modest rebound from intraday lows. Meanwhile, Chaikin Money Flow sits below zero, showing capital continues to leave the asset rather than enter it.

Longer-term charts present a mixed picture. According to crypto analyst World Of Charts, Ethereum is currently testing a multi-year ascending trendline support that has held since 2022. 

The analyst argued that maintaining this level and reclaiming the descending resistance overhead could pave the way for a larger bullish move, though confirmation remains necessary before any sustained recovery can be expected.

A more cautious view came from analysts at Team Lambo, who warned that Ethereum has entered a bearish breakdown zone after slipping below a key trendline on higher timeframes.

“In those 5 days either we will go tap the Weekly OB at 1600 or we might not break this at all. I have mentioned two important levels of 1750 and 1600 already. If they come, we expect a sharp reaction off there.”

Liquidation risks remain elevated around key levels

Derivatives markets suggest traders are preparing for increased volatility near current prices. Recent liquidation data showed long positions absorbed the majority of forced closures during Ethereum’s decline below $2,000. The breakdown accelerated after leveraged bulls lost support levels that had previously held throughout May, triggering a wave of liquidations that pushed ETH toward the current support zone.

Open interest has declined alongside price, showing leverage has been flushed from the market. Funding rates have also weakened compared with levels seen during the April rally, suggesting bullish conviction has faded considerably.

A recovery above $2,000 would be the first sign that buyers are regaining control. Beyond that level, the former channel support near $2,100 and the descending trendline around $2,200 represent the next major resistance zones.

For now, however, the focus remains firmly on $1,800. Holding that support could give bulls an opportunity to stabilize the market and target a relief rally.

A decisive breakdown below it would place $1,750 and $1,600 back into view and strengthen the bearish case heading into the second half of June.