Ethereum’s Value Drops as Genesis Trading Initiates Repayment to Creditors

Ethereum (ETH) experienced a 2.5% decline on Friday as Genesis Trading initiated the transfer of ETH to various addresses in preparation for repaying creditors. Concurrently, ETH ETFs observed net inflows for the second time this week, with a notable slowdown in Grayscale outflows.

According to data from Farside Investment, Ethereum ETFs recorded a total net flow of $26.7 million on Thursday. Notably, BlackRock’s iShares Ethereum ETF (ETHA) saw inflows surpassing outflows from Grayscale Ethereum Trust (ETHE) for the first time since their launch.

The bearish pressure from ETHE outflows has been diminishing following significant asset losses in the initial week of ETH ETF introductions. Consequently, the impact of ETF activity may begin to manifest on ETH’s price trajectory in the upcoming weeks.

Despite these developments, potential challenges loom in the crypto market that could influence ETH’s rally prospects in August. The looming bearish pressure stemming from the Mt. Gox BTC repayment could have cascading effects on the broader crypto landscape, including Ethereum.

Genesis Trading recently transferred substantial amounts of BTC and ETH to various addresses, totaling $2.1 billion and $838 million, respectively, as part of its bankruptcy proceedings to commence creditor repayments. The company had filed for bankruptcy in January 2023 due to mismanagement of investor funds through the Gemini Earn program.

In a contrasting move amidst declining prices and impending headwinds, a smart money wallet with a 100% success rate acquired 4,000 ETH at an average price of $12.58 million in recent hours. Large ETH holders in 2024 have consistently shown demand within the $2,800-$3,000 price range since the year’s onset.

Technical analysis indicates that Ethereum, currently trading around $3,037 with a 2.5% decrease, may potentially form a W-shaped pattern as it nears crucial support levels ranging from $2,852 to $2,803. A successful defense of this support zone could propel ETH towards challenging the $3,731 resistance level, albeit encountering initial hurdles at $3,357.

The 50-day Simple Moving Average (SMA) stands above ETH’s price in the daily chart, potentially serving as resistance around $3,357. A breach below the $2,803 support level would invalidate the bullish outlook for Ethereum.