Ethereum fell below the 2,500-dollar mark on Thursday, sliding nearly 4 percent as a sharp sell-off in global bond markets rattled risk assets. The world’s second-largest cryptocurrency dropped for a third consecutive session, trading near 2,476 dollars, as investors dumped speculative positions and rotated towards the surging yields on US government debt.
Treasury Yields Hit a 24-Year High
The catalyst for the rout was a historic move in US Treasuries. The yield on the benchmark 10-year note climbed to 5.35 percent, its highest level in 24 years, while the 30-year yield pushed above 5.70 percent. As borrowing costs across the economy march higher, risk assets from technology stocks to cryptocurrencies have come under heavy pressure, and ether has been no exception.
Higher bond yields make the guaranteed returns on government debt more attractive relative to volatile assets like crypto, draining demand from the market. With yields at levels not seen since before the financial crisis, traders have little incentive to hold risky positions.
Spot Ether ETFs Shed 565 Million Dollars in Seven Days
Institutional demand is fading fast. US spot ether exchange-traded funds recorded 160.9 million dollars in net outflows on 7 October, led by BlackRock’s ETHA with 116.1 million dollars of redemptions. That followed a 201.9 million-dollar outflow the previous day, the largest in three weeks.
The selling has now stretched to seven consecutive days, with cumulative outflows totalling around 565 million dollars. The relentless withdrawals suggest that professional investors are cutting exposure to ether until the macroeconomic picture becomes clearer.
Futures Liquidations Top 228 Million Dollars
Leveraged traders have been caught badly offside. Around 228.02 million dollars of ether futures positions were liquidated in the past 24 hours, including 193.15 million dollars in long positions betting on a price rise. The largest single liquidation was worth 141.16 million dollars.
Total open interest has fallen 6.41 percent, a 2.20 billion-dollar drop, to 32.15 billion dollars, pointing to a significant deleveraging event across crypto derivatives markets. Such washouts can eventually set the stage for a recovery, but for now they are amplifying the downward move.
Trump Post on Iran Eases Yields
Yields eased later in the session after Donald Trump said in a Truth Social post that the United States would not attack Iran before the 3 November midterms. The 10-year yield retreated to around 5.23 percent, offering some respite to battered risk assets, though ether has yet to reclaim lost ground.
Fed Minutes Signal Another Rate Hike
The minutes of the Federal Reserve’s September meeting added to the bearish backdrop. Officials signalled that another interest-rate increase is likely before year-end, keeping upward pressure on bond yields and the dollar. For an asset like ether, which typically thrives in easy-money conditions, the prospect of further tightening is a stiff headwind.
Support at 2,355 Dollars Under Threat
From a technical standpoint, ether has breached its 50-day exponential moving average, a key short-term trend indicator. The next level to watch is the 100-day EMA, sitting near 2,355 dollars. A decisive break below that support could open the door to a deeper correction, while a rebound above 2,600 dollars would suggest the worst of the selling is over.
Glamsterdam Upgrade Approaches
The fundamentals offer some longer-term hope. The Glamsterdam network upgrade is targeting a Hoodi testnet activation on 26 October, a key milestone on the road to Ethereum’s next major overhaul. Developers see the upgrade as important for scaling and efficiency, though network upgrades rarely support prices in the middle of a macroeconomic storm.
What UK Investors Should Know
For UK investors, the sell-off is a reminder of how sensitive crypto remains to global interest rates. Sterling-based investors should note that dollar-denominated losses can be amplified or cushioned by moves in the pound. Anyone considering buying the dip should be prepared for further volatility while Treasury yields remain elevated.
As always, only invest what you can afford to lose, and consider pound-cost averaging rather than trying to time the market. Diversification across asset classes remains the most reliable defence when both bonds and crypto are moving sharply.
