Ethereum (ETH) Stumbles After Spot ETF Launch, Grayscale Outflows Slow

Ethereum (ETH) Stumbles After Spot ETF Launch, Grayscale Outflows Slow

The launch of US-based spot Ether exchange-traded funds (ETFs) has had a mixed impact on the Ethereum price. While BlackRock’s iShare Ethereum Trust (ETHA) saw positive inflows of $91.4 million on August 1st, Grayscale’s Ethereum Trust (ETHE) continues to experience outflows, with the total exceeding $2 billion since its conversion to a spot product.

Grayscale Outflows Slowing Down

Despite the significant outflows, there are signs of a potential slowdown. On August 1st, ETHE’s net outflow was $78 million, dipping below $100 million for the first time since its launch. This has led some analysts to believe that the outflows may be nearing a turning point, potentially acting as a bullish catalyst for ETH.

Ethereum Spot ETF Flows Remain Volatile

Overall, spot Ether ETF flows have been volatile throughout the week. BlackRock’s ETHA has been the dominant force, attracting inflows, while Grayscale’s ETHE continues to see outflows. This volatility reflects the sensitivity of the ETH price to these inflows and outflows.

Ethereum Price Under Pressure

Following a brief surge before the ETF launch, the ETH price has fallen by 8.5%, currently trading around $3,168. This decline is attributed to several factors, including:

  • Large Ethereum Deposits by Elwood: Recent whale activity on crypto exchange Binance, with Elwood-linked wallets depositing a significant amount of ETH, has raised concerns about a potential sell-off.
  • Ethereum Options Expiry: The expiry of $600 million worth of Ethereum options today, with a put-call ratio of 0.55, could also be contributing to the price volatility.

Analyst Predictions Remain Divided

Despite the recent price drop, some analysts remain optimistic about Ethereum’s long-term prospects. The ongoing accumulation by whale and shark investors suggests anticipation of a future price increase. Additionally, renewed inflows into the crypto market, with stablecoin market capitalization reaching its highest level since April 2022, could provide further support.

ETH/USD Technical Outlook Uncertain

The technical outlook for Ethereum is unclear. The price is currently consolidating around $3,165, facing resistance at the $3,200 mark. A break above this level could lead to a short-term rally, while a decline below the crucial $3,000 support zone could trigger further losses.

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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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