Ethereum [ETH] exchange-traded funds (ETFs) are currently witnessing sustained capital outflows, contrary to prior optimistic expectations of ETFs stimulating demand.
This observed trend has caught the attention of various analysts, with some linking it to ETH’s recent bearish trend.
As per Wu Blockchain data, net outflows from Ethereum spot ETFs peaked at $15.114 million on September 17th.
Further scrutiny of Ethereum ETF data indicated minimal positive fund inflows throughout the week, with outflows dominating investor movements.
The substantial outflows from Ethereum ETFs likely contributed to ETH’s recent market performance, which has been in line with subdued market sentiment, subsequently affecting network activity levels.
Evidently, the lackluster investor enthusiasm reflected in ETH’s recent price movement, with ETH only posting a modest 7.7% increase compared to Bitcoin’s 14% surge from the monthly low.
This underscores the diminishing demand for ETH, which was trading at $2,321 at the time of writing.
The Relative Strength Index (RSI) for ETH has been struggling to breach the 50% mark, underscoring weakened bullish momentum. Nonetheless, the Money Flow Index (MFI) hints at ongoing liquidity inflows into ETH, albeit at limited volumes.
Is ETH Poised for a Strong Recovery?
While a substantial rebound is not off the table, ETH’s prevailing situation is shaped by a confluence of factors, including ETF outflows and diminished on-chain activity.
A turnaround in these aspects could reignite robust demand, particularly if Ethereum ETFs begin witnessing notable capital inflows.
The current price level of ETH may be deemed relatively stable, yet cloaked in uncertainty, impacting its performance, even in the derivatives market segment.
Notably, in the past 24 hours, Open Interest levels have plummeted, alongside a dip in buying activity, indicating potential market fluctuations.
There are indications that ETH’s recent performance woes might also be linked to whale activities, as evidenced by a drop in long positions among prominent traders during Tuesday’s trading session.
However, a subsequent rebound suggests a potential reversion to a bullish sentiment among these key market players.
In the past 24 hours, both global long positions (yellow) and long positions among top addresses (green) have seen a notable recovery, hinting at a possible show of strength from ETH bulls heading into the upcoming weekend.
Nonetheless, this movement hinges on whether ETH can muster sufficient demand and momentum to propel its price upwards.