Ethereum Sheds Over 7.5% of its Gains as ETH ETF Outflows Increase

Ethereum has shed over 7% of its price gains in the past 24 hours. ETH’s decline coincides with massive outflows from Grayscale’s converted Ethereum Trust ETF (ETHE).

Data from SoSoValue reveals that ETHE’s net outflow exceeded $810 million over two days. ETHE’s performance is similar to Grayscale’s GBTC outflows after the Spot BTC ETFs launched.

Despite this significant outflow, most ETH ETFs still recorded inflows during Wednesday’s trading session. BlackRock’s ETHA led the list of gainers with inflows of $283.9 million, while Bitwise’s ETHW recorded $233.6 million as an inflow. Also, Fidelity’s FETH recorded inflows of $145 million.

Analysts React as ETH Posts Short-Term Bearish Outlook

While ETH is down by 7.8% today to trade at $3,175, it still has 71.9% price gains on the year-to-date record. According to financial analyst Mario Nawfal, the spot Ethereum ETFs recorded a net outflow exceeding $133 million. Comparatively, Bitcoin ETFs recorded inflows within the same timeframe.

ETHEREUM ETFs SLIDE AS BITCOIN’S BOUNCE BACK

Ethereum ETFs saw a net outflow of over $133 million, while Bitcoin ETFs are pulling in fresh capital again.

While many Ether ETFs saw modest or zero inflows, Grayscale had over $326 million of outflows.

This shift suggests… pic.twitter.com/4E4MhbnxXC

— Mario Nawfal (@MarioNawfal) July 25, 2024

Most Spot Ether ETFs had modest or zero inflows on Wednesday, while Grayscale recorded over $326 million in outflows. While Spot Ether ETFs witnessed massive outflows, the eleven Spot Bitcoin ETFs recorded net inflows of $44.51 million.

However, GBTC recorded net outflows of $26.22 million, which suggests negative investor sentiment towards Grayscale’s products.

Coinglass data reveals that Ether’s price drop in 24 hours led to the liquidation of approximately $101 million in open ethereum positions. This magnitude of liquidation occurred because 96% of traders were in long positions anticipating further price gains.

Notably, Bitcoin’s price witnessed a similar 20% dip following the launch of the Spot Bitcoin ETFs. Bloomberg ETF specialist James Seyffart highlighted the difference between Bitcoin and Ether ETFs. Seyffart noted that the massive outflows from the ETHE spot Ether ETF are higher than those recorded from GBTC.

Here’s the side by side of the first day of trading for #Ethereum ETFs vs #Bitcoin ETFs.

The major difference to me is the comparatively massive $ETHE outflow. I think $GBTC didn’t have that on day 1 because it was still at a meaningful discount when it launched pic.twitter.com/w0nkJDzjX3

— James Seyffart (@JSeyff) July 24, 2024

Meanwhile, the finance platform Watcher. Guru noted that Spot Ethereum ETF trading volume surpassed $1 billion for a second consecutive day. So, Ether will likely recover from its current price slump in the coming days and post impressive gains.

Notably, the launch of the Spot Bitcoin ETFs on January 10 did not immediately affect Bitcoin’s price positively. However, Bitcoin rallied to a new all-time high of $73,737 on March 14. 

Hence, speculations are that ETH will follow a similar trajectory, likely retracing before its next rally.

How is Ethereum Faring Today?

ETH has formed two consecutive candles on the daily chart, with lower lows confirming increased selling pressure. On July 23, Ethereum faced rejection at the $3,500 price level, causing a price decline to the $3,126 support level.

ETH rallied between July 8 and 15 before facing pressure from sellers at $3,500. The RSI indicator, with a value of 41.23, is dropping from the neutral zone to the oversold region.

This confirms the sellers’ determination to force ETH to decline further. Moreover, the MACD is below the signal line, confirming the bearish sentiment.  

Given the bearish sentiment, ETH could decline further in the coming days. However, if the RSI indicator enters the oversold region below 30, ETH will likely rally again to retest $3,500.