Ethereum Exchange-Traded Funds (ETFs) Gather Momentum Amid Analysts’ Optimism Towards Approval
Since their launch on July 23rd, spot Ethereum (ETH) exchange-traded funds (ETFs) have witnessed total net outflows of $524 million. Throughout August, these financial instruments experienced only seven days of positive inflows, according to data from SoSoValue.
The interest in these products continues to wane, with September 3rd marking a significant milestone as ETH ETFs saw redemptions amounting to $47 million, marking the largest outflows in more than four weeks.
The BlackRock iShares Ethereum Trust (ETHA) recorded no inflows in the last three trading days, signaling a declining interest among investors.
Bloomberg’s ETF analyst Eric Balchunas suggested that the unlocks from the Grayscale Ethereum Trust (ETHE) ETF exerted a notable impact on demand in August. However, once these outflows subside, there is potential for a rebound in the ETF market.
Nevertheless, it’s not just Ether ETFs experiencing reduced demand. Spot Bitcoin (BTC) ETFs have also seen consecutive outflows over the past five days.
What Is the Current Performance of ETH?
Amidst the outflows from Ethereum ETFs and a bearish sentiment prevailing in the wider market, the price of ETH has taken a hit. Over the past 24 hours, ETH witnessed a nearly 6% drop, trading at $2,368 at the time of publication.
The downward trend seems to stem from increased selling activity. Data from CryptoQuant indicates that between August 31st and September 3rd, over 257,000 ETH was transferred to exchanges, indicative of a selling inclination.
Technical indicators further reflect an increase in selling pressure, with the Chaikin Money Flow (CMF) indicator transitioning to the negative zone after a brief period of buying activity. Additionally, the Moving Average Convergence Divergence (MACD) line has remained below the signal line for the past week, with red histogram bars indicating selling momentum.
Following the failure to maintain a critical support level at $2,405, sellers seem to have become more active. While ETH has found a new support level at $2,367, a possible liquidity sweep down to $2,306 cannot be ruled out.
Hyblock Capital’s data also suggests a significant number of liquidations if the price were to drop to $2,280, making it another crucial support level where buyers might step in. For a bullish reversal confirmation, ETH needs to break through the resistance barrier at $2,466.
The Ethereum network is facing challenges in supporting a price surge as the number of active addresses continues to dwindle. The count of active addresses has decreased by nearly half since mid-August, as per CryptoQuant data.
With declining network activity, ETH necessitates backing from the broader market and an upswing in market enthusiasm to sustain a consistent uptrend.