Ethereum dips below $4,000 amid macro jitters and slowing ETF inflows

Ethereum's price dipped below $4,000 for the first time since early August during Thursday morning trading hours.

According to The Block's Ethereum price page, the cryptocurrency traded around $3,999 at around 1:00 a.m. on Thursday. It has since recovered to $4,037, down 2.91% in the past 24 hours.

"Ethereum’s recent dip below the psychological $4K mark was triggered by a mix of technical breakdowns, macroeconomic jitters, and cascading liquidations," said Rachael Lucas, crypto analyst at BTC Markets. "A failure to hold the $4,200 support zone led to over US$1.7 billion in altcoin liquidations, with ETH alone accounting for US$212.9 million."

While the U.S. Federal Reserve lowered interest rates in September, the 25 basis point rate cut failed to ignite a sustained bull rally as once expected. One of the factors was Chair Jerome Powell's comment, saying that he is in no hurry to further lower rates.

On top of that, Ethereum spot exchange-traded funds have seen reduced inflows this month. So far in September, ETH ETFs have collectively accumulated only $110 million in net inflows, where August's inflow amount exceeded $3.8 billion.

However, the crypto analyst said long-term holders of ETH are doubling down on the contrary — "On-chain data shows over 420,000 ETH withdrawn from exchanges this week, suggesting accumulation rather than panic."

Nassar Achkar, Chief Strategy Officer at CoinW, also pointed out that Ethereum exchange balances have fallen to lowest levels in nine years, with millions worth of ETH being withdrawn from centralized exchanges.

"[This underscores] a profound shift toward long-term holding amid growing institutional confidence," Achkar said. "This sustained outflow signals a potential supply shock on the horizon, as whales and retail buyers prioritize self-custody and staking yields over short-term trading, potentially setting up ETH's next major price rally towards new all-time highs."