Ethereum has faced significant pressure throughout December, with its recent drop below $3,000 clearly impacting investor sentiment. On-chain data reveals a marked decline in profitability across the network, as the portion of ETH supply held at a profit has fallen below 60%. At the same time, institutional interest has waned, with Glassnode data indicating that both retail profitability and institutional involvement in Ethereum have weakened in tandem.
The decline in Ethereum’s profitable supply is one of the clearest signs of strain. As prices have fallen, more investors have moved into loss positions. Ethereum briefly reclaimed the $3,000 level on December 22, pushing the profitable supply share back above 60% to around 63%. However, this recovery was short-lived, and the price fell back below $3,000 within hours. As a result, the share of supply held at a profit dropped below 60%, down from over 70% earlier in the month. This suggests the downturn is now affecting not only recent buyers but also those who accumulated ETH at the start of December.
The weakness in on-chain profitability and price is also reflected in ETF trends. Glassnode data shows that since early November, the 30-day moving average of net flows into U.S. spot Ethereum ETFs has turned negative and remained there. This sustained outflow points to a period of reduced participation and disengagement from institutional traders. Inflows that helped drive Ethereum to new highs in August have faded, replaced by consistent outflows through November and December. Since ETF demand has been a key source of buying pressure, its decline has made it harder for Ethereum to absorb selling, contributing to its inability to hold above $3,000.
The combination of negative ETF flows and recent price action helps explain the rise in unrealized losses. Notably, various on-chain sources also show whale addresses reducing their Ethereum exposure outside of spot ETFs. For example, Lookonchain recently highlighted a wallet—believed by some to be linked to Erik Voorhees—that swapped 4,619 ETH (worth roughly $13.42 million) into Bitcoin Cash over the past two weeks after nearly nine years of inactivity. Voorhees later clarified that the wallet does not belong to him and that he holds no Bitcoin Cash.
Lookonchain also noted selling pressure from BitMEX co-founder Arthur Hayes, who has sold a total of 1,871 ETH (approximately $5.53 million) over the past week.
Frequently Asked Questions
Frequently Asked Questions Ethereums Price Drop Below 3000
BeginnerLevel Questions
1 What does it mean that Ethereum fell below 3000
It means the market price to buy one ETH dropped under the 3000 USD mark This is a significant psychological and technical threshold that many investors and traders watch closely
2 Why is the 3000 price level so important
3000 is a major roundnumber support level When prices hold above it it suggests strength and buyer confidence Falling below it can signal weakening momentum trigger automatic sell orders and shift market sentiment to more negative or cautious
3 Im new to crypto Does this mean Ethereum is failing
Not necessarily Cryptocurrency markets are highly volatile While a drop below a key level like 3000 indicates a bearish trend its a common occurrence in crypto cycles The longterm viability depends on technology adoption not just shortterm price
4 What are deeper losses for investors
It refers to investors who bought Ethereum at prices above 3000 now seeing the value of their holdings decrease further For example someone who bought at 3500 has now lost more money per ETH than when the price was at 3100
5 Should I buy Ethereum now that its cheaper
This is a personal financial decision While some see it as a buying opportunity prices could continue to fall Never invest more than you can afford to lose and consider dollarcost averaging instead of timing the market
Advanced MarketFocused Questions
6 What are the main factors causing Ethereum to drop below 3000
Common factors include broader crypto market downturns negative macroeconomic news network congestion or high gas fees regulatory concerns and largescale selling by whales
7 What is a support level and what happens if it breaks
A support level is a price point where buying interest has historically been strong enough to prevent the price from falling further If it breaks it can lead to a swift decline as selloffs accelerate and the market searches