In a surprising turn of events for the cryptocurrency markets, Ethereum ETFs registered a staggering $555 million in outflows over two consecutive weeks concluding on October 24. This downturn marks the first instance of back-to-back weekly declines for Ethereum funds since April 2024. As Ethereum prices struggle for stability, investors have been pulling back, leading to heightened selling pressure on these funds.
The data reveals a pronounced shift in investor behavior, with Fidelity’s FETH fund leading the charge in redemptions, witnessing withdrawal of $95.2 million in the latest week alone. Following closely is BlackRock’s ETHA, which saw $89.1 million pulled out during the same timeframe. Other notable contributors to this negative trend include Grayscale’s offerings, with its ETHE fund experiencing a $26.1 million exit and the ETH fund seeing a $23.5 million loss. Additionally, Bitwise’s ETHW and VanEck’s ETHV accounted for another $10 million in combined outflows.
Meanwhile, it’s important to contrast this trend with the performance of Bitcoin ETFs, which have experienced a renaissance of fresh capital, attracting $446 million last week. The divergence in sentiment between Bitcoin and Ethereum underscores a significant shift in market dynamics, illustrating the contrasting trajectories of these two leading cryptocurrencies.
This series of outflows comes in the wake of broader market turbulence and investor apprehension regarding economic conditions. The release of the Consumer Price Index data, highlighting a rise in headline inflation from 2.9% to 3.0%, has led to increased caution among investors. As they brace for monetary policy adjustments, the appetite for riskier assets has diminished, with Ethereum and its ETFs bearing the brunt of this sentiment.
Despite the outflows, Ethereum’s price has shown resilience. After plummeting to $3,880 on October 24, the asset rebounded past $4,200 over the weekend, trading at $4,229 as of the latest updates. This recovery, spurred by more than a 7% surge within 24 hours, has analysts speculating on its potential to breach the $4,600 mark in the near term.
Some experts point out that the technical indicators suggest a bullish momentum for Ethereum, suggesting it may be on the cusp of significant price movements. Analyst Pascal indicated that Ethereum seems to be completing Wave 4 of Primary Wave 3 in Elliott Wave theory, a phase typically precedes robust breakouts. Furthermore, recent MACD crossover patterns on daily charts reinforce the potential for an upward trajectory.
As Ethereum grapples with these complexities, market participants will keenly watch how it navigates through these challenging waters, particularly with ongoing fluctuations in investor sentiment and macroeconomic conditions. The unfolding relationship between Ethereum and Bitcoin ETFs will undoubtedly continue to captivate the attention of crypto enthusiasts and investors alike.
