- Ethereum ETFs recorded $77.3 million in net outflows on Wednesday.
- Wallet related to Elwood Technologies has moved 19,500 ETH to Binance within the past two days.
- Ethereum could bounce off key support level to set new yearly high.
Ethereum (ETH) is down 6% on Thursday following huge exchange deposits by Elwood Technologies and net outflows across ETH ETFs.
Daily digest market movers: Fed rates, Negative flows, ETH exchange deposit
Following the Federal Reserve's decision to keep rates steady at 5.25%- 5.50%, the crypto market has entered a downturn, with Ethereum taking a 6% hit. This also affected the flows seen in Ethereum ETFs.
The combined flows for the nine Ethereum ETFs were negative at -$77.3 million on July 31 as the new Eight failed to soak up $133 million in outflows from Grayscale Ethereum Trust (ETHE).
While ETH ETFs haven't been able to affect ETH's price, Katalin Tischhauser, Head of Investment Research at Sygnum Bank, predicted that they could rake in $5 billion to $10 billion in an interview with Cointelegraph.
She predicted that ETH could rally if/when inflows "turn positive and accelerate" as the market is yet to price in the impact of potential high inflows in ETH ETFs.
Tischhauser noted that ETH could rise to $6,000 if its inflow follows a similar pattern to spot Bitcoin ETFs.
Meanwhile, three wallets related to Elwood Technologies have transferred 19,500 ETH worth $63.66 million to Binance in the past two days, according to data from Lookonchain. This marks the second consecutive time that the wallets' exchange deposits coincided with a crash in ETH's price.
ETH technical analysis: Ethereum could bounce off key support
Ethereum is trading around $3,110 on Thursday, down more than 6% on the day. The price drop triggered over $77.96 million in liquidations, with long and short liquidations accounting for 94% and 6%, respectively.
ETH Long/Short Ratio has declined to 0.92, indicating that most traders expect further price decreases. The support ranging from $2,852 to $2,803 will prove crucial if ETH's price plunges further. ETH has tested this level several times in the past four months, but buyers have always entered the market to prevent a further decline. As a result, a price rise has often accompanied a move to this level.
ETH/USDT Daily chart
Also, most traders are bullish in the long term due to the potential effect of spot ETH ETFs when Grayscale outflows diminish.
Hence, ETH could rise over 30% in the coming weeks to test the $4,093 resistance. A move below $2,800 will invalidate the bullish thesis.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.
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