Despite the launch of Ethereum ETFs, ETH has struggled to break the $3,400 resistance level. A primary factor is the significant outflows from Grayscale's spot Ethereum ETF, contributing to price declines. As of July, Ethereum’s price dropped to $3,278, marking a 1% monthly loss despite the U.S. introduction of spot Ethereum ETFs.
Since their debut on July 23, U.S. spot Ethereum ETFs have seen a 9% price drop, with ETH declining 4.05% overall. Multiple factors may be suppressing its performance.
ETHE Outflows Outpace GBTC
According to Sosovalue, ETF performance has been weak, with a cumulative net outflow of $439.64 million.
Key observations:
- Grayscale dominates the selling pressure.
- Competitors like BlackRock, Bitwise, and Fidelity recorded daily positive inflows as of July 29.
Analysts note that Grayscale’s ETHE outflows accelerated faster than GBTC post-Bitcoin’s market slump. Glassnode data highlights asset losses for both instruments since conversion.
Crypto analysts predict ETHE outflows may taper soon. However, Ethereum exchange withdrawals have dwindled since March, signaling weak demand. Independent analyst Crypto Lion links this to price stagnation, citing "almost no demand."
Leverage and Market Sentiment
The Estimated Leverage Ratio (ELR) has driven ETH’s volatility, reflecting futures dominance over spot trading. High ELR often precedes short-lived price swings. Crypto Lion advises caution:
"With unresolved ELR issues and no withdrawals, buying ETH is currently risky."
Coinbase Premium Index Turns Negative
Coinbase’s ETH Premium Index, which peaked in March alongside ETH’s price, has turned negative—indicating dwindling U.S. investor interest. This reversal contrasts with May’s bullish trend when ETF speculation boosted demand.
Key Takeaways:
- Grayscale outflows pressure ETH prices.
- Low withdrawal volumes suggest muted demand.
- Negative Coinbase premiums reflect weak spot buying.
FAQ
Why hasn’t ETH price risen post-ETF approval?
Grayscale’s ETHE outflows and low spot demand have offset ETF-driven optimism.
What does a negative Coinbase Premium Index mean?
It signals reduced buying interest from U.S. investors, often bearish for ETH.
Is leverage affecting ETH’s price stability?
Yes, high ELR indicates futures-driven volatility, making prices prone to sharp swings.
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Data sources: Sosovalue, Glassnode, Cryptoquant