Research Reveals that Ethereum ETF Sell-Off Signals a Weaker Market Structure

26.07.2024 12:01:19 Yorum Yok Görüntülenme

The much-anticipated Spot Ether ETF launch euphoria seems to be fading following massive outflows from the funds. These Ether ETF outflows triggered a bearish sentiment, leading to a price decline for Ethereum in the last 24 hours. 

Ethereum (ETH) trades at $3,184, down 8% in the past day. Amid growing concerns, Analytical firm 10x Research revealed that the outflows for Spot Ether ETFs follow a similar pattern to Spot Bitcoin ETFs.

Moreover, the launch of Ethereum ETFs coincides with the first round of Mt. Gox crypto distributions, which might have depressed market sentiment.

10x Research Highlight Ethereum’s Price Dip

According to 10x Research, Grayscale’s $9 billion Ethereum Trust recorded massive outflows of nearly $1 billion in two days.

Meanwhile, Bitwise’s Ethereum spot ETF recorded approximately $204 million in inflows on the first trading day. These contrasting trading positions hint at a mixed market sentiment among investors. 

10x Research gives a bearish outlook on Ethereum’s price based on current market conditions. 10x Research notes that Bitcoin enjoys investors’ confidence as it is digital gold. However, Wall Street traders are likely cautious with their Ethereum investments.

Data from Farside Investors reveals that Spot Ether ETFs recorded net outflows of $113.3 million on their second trading day. Grayscale’s Ethereum Trust accounted for most outflows in the past two days, losing $326.9 million yesterday.

Fidelity’s Ethereum Fund (FETH) and Bitwise Ethereum ETF (BITW) led the inflow charts with $74.5 million and $29.6 million, respectively. 

According to crypto analyst Daan Crypto Trades, the ETFs have suffered significant outflows. Daan expects the Ether ETF situation to improve once ETHE outflows drop to $100 million or below by next week.

Also, the analyst noted that some investors recall the GBTC outflows and are trying to offload Grayscale’s ETHE. So far, the ETFs have lost 10% in outflows. However, Daan Crypto Trades believes that ETHE will not remain an issue as more inflows could soon balance the impact. 

More Reactions to Spot Ether Outflows

Also, Daan believes that if the outflows from Ether ETFs follow a similar pattern to GBTC, it might recover soon.

However, he believes that Spot Ether ETF performance remains speculative until the market finds balance. Additionally, he noted that the excitement before the Spot Bitcoin ETF launch was much higher, and the market was different.

Daan studied Ethereum’s behavior on the price chart, noting that it dropped to the lower range and testing the 200-day MA/EMA. He advised investors to wait for a drop to $2,800 or a rally to $3,700 to determine Ethereum’s next price moves.

Meanwhile, analyst Michaël van de Poppe noted that investors’ shift to Ethereum will increase in the coming days. Van de Poppe believes that gaining $1 billion in trading volume on the first day is massive for an ETF.

Also, the analyst stated there will likely be a minor price correction during the offload of the Grayscale ETHE Trust. He noted that Bitcoin faced a similar situation in the first month of trading the US spot BTC ETFs. 

So, Ethereum will likely witness a price recovery if investors remain resolute and retain the Spot Ether ETFs.

The post Research Reveals that Ethereum ETF Sell-Off Signals a Weaker Market Structure appeared first on The Tech Report.

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