On Thursday, Ethereum (ETH) exchange-traded funds (ETFs) recorded their lowest daily inflows since their launch on July 23.
The nine US-based funds saw net inflows totaling $26 million that day. Although modest, this represents the third time spot ETH ETFs have recorded inflows since their launch ten days ago.
The Waning Interest in Spot ETH ETF
When these funds went live on July 23, they saw a net inflow of $107 million and a trading volume of over $1 billion. However, the hype around them only lasted a day, as the ETFs recorded outflows in the four days that followed.
According to data from SosoValue, daily net outflows from spot ETH ETFs totaled $653 million between July 24 and 29. Daily trading also dwindled during that period, dropping by 22% over the four-day time frame.
While the overall trend indicates waning enthusiasm, there are notable disparities among the Ether ETF providers. For example, Grayscale’s Ethereum Trust (ETHE) bucked the overall trend by being the only fund recording outflows yesterday, totaling $78 million.
In contrast, BlackRock’s iShares Ethereum Trust (ETHA) attracted inflows of $90 million during the period in review.
Read more: Ethereum ETF Explained: What It Is and How It Works
On Thursday, other funds, including the Fidelity Ethereum Fund (FETH) and the Bitwise Ethereum ETF (ETHW), also saw inflows of $12 million and $3 million, respectively.
Market experts, including Griffin Ardern, Head of BloFin Research & Options, believe investors should not worry about ETH’s recent pullback. Ardern explains that in the pre-period of ETF asset allocation, investors typically sell rather than buy.
Many who bet on ETFs cash out their assets to ETF buyers after listing, and early trust investors, who face long lock-up periods, also aim to sell their shares at the market price quickly. As these early investors and pre-launch speculators exit, the asset allocation period will bring in new cash flow, similar to price changes seen before and after the launch of spot BTC ETFs.
Many early investors in ETH are PE and VC investors from the primary market. For them, the listing of ETFs is the listing of ETH. Now all that is left is the last step: cashing out & exiting. The impact of short-term market sentiment is inevitable. In the options market, traders’ recent sentiment is relatively conservative, but the medium- and long-term sentiment has not been affected too much, maintaining a stable bullish sentiment. For long-term asset managers, now seems to be a good time to buy the bottom, because the interest rate cut cycle is coming, and risky assets will continue to obtain liquidity for a long period of time and provide considerable returns for long-term PMs,” Ardern told BeInCrypto.
ETH Price Prediction: Demand For the Leading Altcoin Leans
At press time, ETH trades at $3,140. The leading altcoin commenced a new cycle of decline on July 22 and has since formed a descending triangle. This bearish trend is formed when an asset’s price creates a pattern of lower highs and a horizontal support level. Traders interpret it as a signal that selling pressure is increasing.
ETH’s declining Accumulation/Distribution (A/D) Line confirms the surge in selling activity. Since July 22, the indicator’s value has dropped by 6%.
An asset’s A/D Line measures the cumulative flow of money into and out of an asset over a specified period of time. When it declines in this manner, it suggests that liquidity is flowing out of the asset, indicating distribution.
Further, ETH is currently plagued by significant bearish sentiments. This is evidenced by its negative Elder-Ray Index. At press time, the indicator’s value is -198.1.
This indicator measures the relationship between the strength of buyers and sellers in the market. When its value is below zero, it means that bear power is dominant in the market.
ETH’s price may drop to $3,114 if the bearish bias persists. If it breaks below the horizontal support line of the descending triangle ($3,085), its price might fall further to $2,811.
Read more: Ethereum (ETH) Price Prediction 2024/2025/2030
However, if sentiment shifts to bullish and accumulation climbs, ETH may break above the triangle to exchange hands at $3,301.
Disclaimer
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