Ethereum (ETH) is hovering around $2,130, up 1% on Wednesday after facing strong selling pressure over the past week.

The leading altcoin dipped from above $2,300 after retail wallet distributions. The selloff also came following soaring inflation and rising US Treasury yields.

For Ethereum, the coin could face further selling pressure in the near term amid declining institutional demand.

The technical indicators are also bearish at the moment, suggesting further selloff in the near term.

Liquidity pressure intensifies amid ETF outflows

Ether is up 1% in the last 24 hours as the bulls hold the $2,067 support level.

The leading altcoin is down 8% in the last seven days, aligning with the selloff in the broader cryptocurrency market.

The bearish performance comes due to the capital outflows from Ethereum-linked ETFs.

The outflows mean that institutions are reducing their demand for Ethereum ETFs, adding liquidity pressure to the market.

Data obtained from CoinGlass’s Ethereum ETF page reveals that spot Ethereum ETFs recorded an outflow of $61.7 million on Tuesday, after losing $85.6 million the previous day.

In addition to that, the Ethereum Foundation was subject to heightened community scrutiny over transparency and governance stemming from various high-profile leadership departures,

Ethereum’s on-chain data showed significant erosion in DeFi capital, with total value locked in Ethereum protocols falling by over $17 billion since late March.

The recent hacks of various DeFi protocols, including Kelp DAO and Drift Protocol, affected Ethereum’s TVL over the past few days.

While institutional demand is declining, retail traders are increasing their exposure in the market. The derivatives data show improved retail demand.

According to CoinGlass, Ethereum’s futures Open Interest now stands at $32.2 billion, up from the $30.8 billion recorded on Tuesday.

The OI-Weighted Funding Rate also reads 0.0076%. The funding rate has been positive since April 30, indicating growing retail participation.

ETH finds support around key $2,067 zone

The ETHUSD 4-hour chart is bearish and efficient as Ethereum is down 8% in the last seven days.

At press time, ETH is trading at $2,130, below the 50-day, 100-day, and 200-day EMAs clustered above $2,247, $2,317, and $2,557, respectively.

The momentum indicators suggest that the bears are still in control.

The 4-hour RSI at 42 means that the bears are in control, but Ethereum is not yet in the oversold territory.

Meanwhile, the negative MACD reading hints that downside momentum persists despite already-depressed oscillators.

If the bulls regain control, they would encounter immediate resistance at the $2,247 level, which coincides with the 50-day EMA.

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A daily candle close above this level would allow ETH to reclaim the $2,318 resistance zone in the near term.

The resistance levels at $2,557 and $2,771 continue to limit recovery attempts.

However, if the selloff continues, immediate support emerges at the $2,067 level, where a break would expose further weakness in the near term.