Ethereum’s Bearish Trend Eases as Grayscale’s ETHE Outflows Decelerate
Ethereum’s recent downturn may impact expectations regarding ETFs, potentially pushing ETH to a record high of approximately $5,000. On Friday, ETH options valued at $560 million expired amidst the market turmoil. However, there are indications that Ethereum could reestablish a critical support level, with technical indicators hinting at a weakening bearish trend.
The cryptocurrency Ethereum (ETH) experienced a 0.4% increase on Friday, coinciding with another day of slight inflows into ETH ETFs. The recent market volatility has introduced uncertainty into the previously optimistic forecasts for ETFs, potentially propelling ETH to new heights.
The latest data shows that Ethereum ETFs encountered modest net outflows of $2.9 million on Thursday following a 10% surge in ETH’s price. Notably, BlackRock’s ETHA observed inflows of $11.7 million, while Grayscale’s ETHE saw outflows decrease to $19.8 million.
Analysts anticipate a shift towards consistent net inflows for ETH ETFs in the upcoming weeks, especially with ETHE outflows nearing zero. Initial projections by experts like Bitwise CIO Matt Hougan suggested potential net inflows of $15 billion within the first 18 months of ETF launch, potentially driving ETH towards the $5,000 mark.
However, the recent market downturn, which saw ETH drop to around $2,100, may necessitate a reassessment of these predictions. Additionally, the Securities & Exchange Commission (SEC) extended the evaluation period for asset manager Hashdex’s ETF, which includes Bitcoin and Ethereum, until September 30.
Simultaneously, ETH options with a total value of $560 million expired, revealing a Put/Call Ratio (PCR) of 0.96 and Max pain at $2,950. The recent market conditions saw an increase in put options compared to calls, leading to a rise in the PCR from 0.55 to 0.96 over the past week, indicating a bearish sentiment among options traders.
In terms of technical analysis, Ethereum is currently trading around $2,600, with indicators showing $41.03 million in liquidations over the past 24 hours. Despite attempts to surpass the $2,723 resistance level, ETH retraced quickly on the daily chart.
The Relative Strength Index (RSI) and Stochastic Oscillator have both shifted away from the overbought territory in recent days, signaling a potential weakening of bearish momentum. If this trend continues, ETH could retest the $2,723 resistance, aiming for $3,368 with the return of bullish sentiment.
Looking ahead, Ethereum might follow a trendline towards a potential swing low near the $2,000 psychological level before a rebound, based on previous market behavior. Short-term fluctuations could see ETH hovering around $2,548, with traders facing a risk of $24.4 million in liquidations.
