Crypto ETFs Face Steep Declines Amid Market Uncertainty

The iShares Bitcoin Trust ETF (IBIT) is currently trading more than 20% below its recent 52-week high, reached less than a month ago. This peak coincided with the formation of a bearish evening star pattern, and the ETF experienced a notable 3% decline on October 7 alone. The drop below the psychologically important $70 mark has intensified bearish sentiment, with the ETF declining in three of the last four weeks and consistently closing within the lower half of its trading range.

This week has been particularly challenging for Bitcoin investors, with the ETF dropping 8% and recently undercutting its 200-day simple moving average. The 5.5% single-day decline marked the largest drop since April 7, signaling significant selling pressure. According to technical analysts, for investor confidence to return, the ETF must hold near current levels and reclaim the 21-day exponential moving average (EMA), a key indicator of bullish momentum. Historical patterns suggest such recoveries typically take about six sessions, as witnessed back in April.

The Grayscale Ethereum Trust ETF has experienced an even more pronounced decline than its Bitcoin counterpart, now down 34% from its annual peak and showing a negative 5% year-to-date performance. This week alone, the Ethereum ETF dropped 17%, roughly double the decline seen in the Bitcoin Trust ETF. However, this sharp pullback follows a remarkable 220% increase from early April to late August, making the current retreat appear both prudent and necessary from a technical perspective.

Unlike Bitcoin’s ETF, the Ethereum fund has not yet pierced its 200-day simple moving average, having touched it recently while retesting a breakout above a bullish inverse head-and-shoulders pattern. The ETF’s behavior around this critical moving average in the coming week will be crucial for determining its near-term direction. After facing resistance at the $40 level on August 22, recent price action suggests the potential formation of a double-bottom base, provided the recent lows hold firm.

Solana’s performance has been the most concerning among the three major cryptocurrencies, with its ETF plummeting 41% from its most recent 52-week high set in September. This heightened volatility may reflect the asset’s relative newness, as it began trading only in April. The Solana ETF peaked on September 18 and has since formed a bearish island reversal pattern, a technical formation that often signals trend reversals.

Over the past seven weeks, Solana’s ETF has fallen in five of those periods, with three weeks recording double-digit declines. This week alone, the ETF dropped another 19% through just two trading sessions. The daily chart shows a break below the bearish head-and-shoulders pivot at $19, raising concerns of a potential measured move down to $12 if selling pressure continues. This technical breakdown suggests Solana faces the most immediate downside risk among the three major cryptocurrencies.

Despite the current bearish technical outlook, all three cryptocurrencies have attracted attention from major exchange-traded fund issuers and President Trump’s administration, spurring hopes that increased institutional adoption could help stabilize long-term volatility. The involvement of established financial institutions and political support provides a foundation for potential recovery, though timing remains uncertain.

The report from Barron’s suggests that any meaningful recovery for the cryptocurrency trio would require further inflows into these exchange-traded funds, indicating a new wave of bullish sentiment returning to the market. At the time of writing, Bitcoin was trading at $104,190, marking a 3% surge over the past 24 hours, while Ethereum and Solana recorded gains of 5% and 4% respectively during the same period. These recent upticks, while encouraging, must be sustained to signal a genuine trend reversal rather than temporary relief rallies.