TLDR
- Ethereum ETFs saw $77 million in outflows on Wednesday
- Grayscale’s ETHE had the largest outflow of $133.33 million
- Some ETFs like Fidelity’s FETH had positive inflows
- The outflows happened after the Federal Reserve’s decision to keep interest rates unchanged
- An Ethereum Foundation-associated address has been regularly selling ETH
Ethereum Exchange-Traded Funds (ETFs) experienced significant outflows on Wednesday, totaling $77.21 million. This comes just days after their launch and following the Federal Reserve’s decision to maintain current interest rates.
Grayscale’s Ethereum Trust (ETHE) faced the largest outflow, losing $133.33 million in a single day. Since its launch on July 23, ETHE has seen negative flows every day, with total outflows nearing $2 billion over seven trading days.
However, not all Ethereum ETFs saw money leaving. The Grayscale Ethereum Mini Trust recorded $19.54 million in net inflows.
Fidelity’s FETH also performed well, bringing in $18.8 million. BlackRock’s ETHA and VanEck’s ETHV had smaller but still positive inflows of $4.98 million and $4.81 million respectively.
The total net outflow for the eight Spot Ethereum ETFs over their first seven trading days has reached $483.6 million. This negative trend occurred alongside the Federal Open Market Committee (FOMC) decision to keep interest rates at 5.50%.
In contrast to Ethereum ETFs, Bitcoin ETFs saw a small positive flow of $299,000 on the same day. Only two Bitcoin ETFs had net inflows: BlackRock’s IBIT with $20.99 million and Grayscale’s Bitcoin Mini Trust with $18 million.
The price of Ethereum has also been affected, dropping from $3,340 to around $3,100. As of August 1, the ETH price had fallen 4.56% to $3,162.
This price movement led to $53.84 million in long position liquidations over 24 hours, possibly contributing to the price decline.
Adding to market uncertainty, blockchain data shows that an address associated with the Ethereum Foundation has been regularly selling ETH.
On Wednesday, this address sold 150 ETH for 497,250 DAI using the Cow Protocol. This is part of a pattern observed since the start of the year, with the address selling 50 to 200 ETH every few weeks.
A more significant move occurred on July 26, when an Ethereum Foundation wallet transferred 92,500 ETH (worth about $294.9 million) to a new wallet. This was the first major transfer from this wallet in nearly 6.6 years.
Some market analysts suggest that losing support at the $3,300 level could indicate a shift in market sentiment, potentially leading traders to consider short positions on Ethereum.
The Moving Average Convergence Divergence (MACD) indicator is being watched for potential sell signals.
Looking ahead, financial firm QCP Capital expects continued outflows from Grayscale’s ETHE over the next two weeks.
Despite this, they recommend a preference for ETH long positions as ETHE outflows stabilize and ETH price catches up to Bitcoin. QCP Capital has set a target for ETH to break above $4,000, which would be a new high for 2024.
