Analyst Optimistic About Future of Ethereum ETFs
Ethereum exchange-traded funds (ETFs) experienced significant redemptions on the 3rd of September, totaling $47 million, marking the largest outflows in over four weeks. This follows a period where Ethereum ETFs have seen cumulative net outflows of $524 million since their inception on the 23rd of July. According to data from SoSoValue, these products only saw positive inflows on seven days throughout August.
The BlackRock iShares Ethereum Trust (ETHA) specifically recorded zero inflows in the last three trading days. Bloomberg ETF analyst Eric Balchunas highlighted that the unlocks from the Grayscale Ethereum Trust (ETHE) ETF had a substantial impact on demand in August, but he believes that once these outflows subside, the ETFs could potentially rebound.
Notably, Ethereum ETFs are not the only crypto products experiencing decreased demand. Bitcoin ETFs have also seen consecutive outflows over the past five days.
In terms of Ethereum’s performance, the price of ETH has dropped by nearly 6% in the last 24 hours, currently trading at $2,368. This decline can be attributed to an increase in selling activity, with over 257,000 ETH being sent to exchanges between the 31st of August and the 3rd of September, indicating a selling intent.
Technical indicators further suggest a bearish sentiment, with the Chaikin Money Flow (CMF) indicator flipping to the negative region and the Moving Average Convergence Divergence (MACD) line consistently below the signal line. Sellers seem to have intensified their presence after ETH failed to maintain a critical support level at $2,405.
However, ETH has found support at $2,367, with a potential further drop to $2,306. A crucial support level at $2,280 could attract buyers, but a breakthrough above $2,466 is needed to confirm a bullish reversal.
The Ethereum network is facing challenges as the number of active addresses has declined significantly since mid-August. To sustain an upward trajectory, ETH requires broader market support and increased market interest.
In conclusion, the crypto market, particularly Ethereum, is navigating through a period of increased selling pressure and reduced demand for ETFs, highlighting the need for market resilience and positive sentiment to drive a sustainable recovery.
