Ethereum has slid to early 2021 levels, pushing many long-term holders who bought over the past 5 years into loss territory.

According to the blockchain media outlet U.Today on June 30, Ethereum has surrendered most of its gains since the launch of U.S. spot exchange-traded funds and major network upgrades.

The core issue is worsening price action. Trader and analyst Jesse Olson (제시 올슨) said Ethereum’s monthly chart closed below a key support line, increasing the chance it could make a lower low. He said 8 of the past 10 months posted a negative candle. That is seen as a sign that the long-term trend itself is breaking, not just a short-term correction.

Technical indicators also lean bearish. Ethereum’s 200-week simple moving average has tilted downward for the first time, and an assessment said a lower high after a double top was also confirmed. The fact that Ethereum has returned to early 2021 levels even after the launch of spot ETFs, the Merge and a major bull market is adding to market disappointment.

Some in the market have also moved to bet on further declines. On-chain tracking account Onchain Lens said a large investor opened a new short position of 22,000 ETH using 25 times leverage. Onchain Lens put the position’s value at $35 million. It suggests substantial funds are leaning toward continued declines rather than a rebound.

On the supply-and-demand side, spot exchange-traded funds (ETFs) appear to have become a burden. Spot ETFs have recently seen continued net outflows, and institutional demand has also cooled noticeably. As inflows of regulated funds that had drawn expectations weakened, Ethereum’s rebound momentum also faded.

Still, not all long-term outlooks are pessimistic. Tom Lee (톰 리) of Fundstrat, who is also chairman of BitMine Technologies, warned sellers swept up in fear not to make hasty decisions and kept an optimistic long-term view. While short-term price action has deteriorated, differences in views over the possibility of a medium- to long-term recovery remain large within the market.

Future focal points are clear. The media outlet said key variables for an Ethereum rebound remain whether spot ETF fund flows can turn from net outflows, how long the decline in Layer 1 revenue will last, and whether concerns about developers leaving will lead to an actual contraction in the ecosystem.