Ethereum (ETH) Price: 3% Recovery Follows Weekend Drop and $611M ETF Outflows

TLDR

• Ethereum (ETH) rose over 3% on January 26, 2026, after dropping more than 6% during the weekend
• US-listed spot Ethereum ETFs recorded $611.17 million in net outflows over the past week
• ETH broke below its ascending triangle pattern and key moving averages, with RSI dropping below 40
• Japan’s 10-year government bond yields are climbing toward multi-decade highs, potentially reducing global liquidity
• Technical analysis suggests ETH could drop 17-18% to around $2,380 if the breakdown continues

Ethereum (ETH) showed signs of recovery on January 26, 2026, climbing over 3% during the Asian trading session. The bounce came after a weekend sell-off that saw the cryptocurrency drop more than 6%.

The recovery mirrored gains across the broader crypto market. However, the rebound occurred against a backdrop of growing risk-off sentiment in traditional markets. US stock futures posted losses while gold prices reached over $5,000 at the start of the week.

Markets grew uneasy over the weekend as concerns surfaced about a possible US government shutdown. Lawmakers remained divided over funding, raising the risk of a lapse in federal operations.

In the forex market, traders noted possibilities of the New York Fed preparing to support Japanese officials in a direct yen-defense intervention. The US dollar recorded its steepest weekly drop since May, creating dip-buying opportunities in the Ether market.

ETF Outflows Signal Weakening Demand

US-listed spot Ethereum ETFs saw approximately $611.17 million in net outflows over the past week. The data suggests institutional demand for Ether has weakened in the near term.

ETF flows can act as a steady source of spot buying when sentiment improves. The outflows indicate large investors were reducing ETH exposure rather than adding to positions.

Traders have been rotating into other large-cap cryptocurrencies, particularly Solana. This rotation has further thinned Ether’s bid. The result is a rebound that appears more like short-term dip-buying than the start of a stronger, institution-led uptrend.

Japan’s Bond Yields Create Headwinds

Japan’s 10-year government bond yields have been climbing toward multi-decade highs. Investors are demanding a higher risk premium due to fresh fiscal-spending concerns and Japan’s debt load, which exceeds 230% of GDP.

Higher JGB yields can pull capital back toward Japan. This reduces the amount of cheap funding circulating through global markets, conditions that typically pressure risk assets.

The Bank of Japan struck a more hawkish tone in its latest outlook. This reinforced expectations that Japan’s rate regime may continue shifting higher. Firmer yields can also strengthen the yen, increasing the risk of a yen carry-trade unwind.

ETH/USD appears to have broken down from an ascending triangle pattern. The price slipped below the rising support trendline after repeatedly failing near the flat resistance band around the low-$3,300s.

Ethereum is now trading below its key moving averages. The 20-day moving average sits near $3,049 and the 50-day near $3,104. RSI has cooled to below 40, suggesting sellers remain in control.

The price declined below $2,880 and $2,865 to enter a bearish zone. Bears pushed the price below $2,840, with the price finally testing $2,800. ETH is currently consolidating losses below $2,900 and the 100-hourly Simple Moving Average.

Immediate resistance is seen near the $2,920 level. A bearish trend line is forming with resistance at $2,920 on the hourly chart. The first key resistance is near the $2,960 level.

If the breakdown holds, the pattern’s measured move points toward the $2,380 area as the next downside target. This represents a potential drop of 17-18% from current levels. Initial support on the downside is near the $2,840 level, with the first major support near the $2,800 zone.

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