Ethereum Investors Hit the Brakes as Outflows Mount, Price Struggles for Direction

Ethereum Investors Hit the Brakes as Outflows Mount, Price Struggles for Direction

Ethereum (ETH), the world’s second-largest cryptocurrency by market capitalization, is facing a wave of investor outflows, according to the latest report by CoinShares. This negative sentiment has coincided with a recent price correction, leaving analysts questioning the short-term future of ETH.

Outflows Dominate, Ethereum Worst Performer

The report highlights a significant shift in investor sentiment towards Ethereum. Investment products based on ETH experienced the largest outflows since August 2022, totaling a staggering $61 million last week. This brings the two-week outflow total to a worrying $119 million, making Ethereum the worst performing crypto asset year-to-date in terms of net flows.

Bitcoin Sentiment Shifts, Altcoins See Mixed Results

While Ethereum faces an exodus, Bitcoin appears to be attracting cautious optimism. Short-bitcoin products saw outflows last week, suggesting a possible change in sentiment towards the leading cryptocurrency. Several altcoins, including Solana, Litecoin, Chainlink, and XRP, also witnessed inflows, albeit on a smaller scale compared to Bitcoin.

US Dominates Inflows, Europe Sees Outflows

The report further reveals a geographical divide in investment trends. The United States led the pack with inflows of $143 million, while major European regions like Germany, Hong Kong, Canada, and Switzerland faced significant outflows.

Ethereum Price Stumbles After Failed Breakout

Following a brief bullish weekend, Ethereum’s price failed to maintain momentum. A rejection at $3,518 triggered a correction, pushing the price back down to the $3,420 support zone. Analysts attribute this weakness to a combination of factors, including the delay in the much-anticipated Ethereum ETF listing and a potential reversal in Bitcoin’s price.

God Candle Hopes Fading, Analysts Divided

The long-awaited “God Candle” in Ethereum, a massive surge in price, seems less likely in the near future. The delay in the SEC approval of Ethereum ETF applications has dampened investor enthusiasm. Some experts believe a postponement until a bull market arrives might be beneficial, while others are growing impatient.

Looking Ahead: Key Levels and Uncertain Future

Despite the recent correction, Ethereum remains above crucial support at $3,420. If the bulls can regain control, a retest of the resistance at $3,470 is possible. However, a sustained break below $3,420 could trigger further losses towards $3,350.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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