Ethereum Price in Downtrend Despite Spot ETH ETF Approval

Ethereum’s price has experienced a significant downturn following a substantial outflow from Grayscale’s Ethereum Trust.

Over the past two days, Grayscale’s Ethereum Trust has seen outflows amounting to 9% of its initial holdings, contributing to a net outflow of $113.3 million from newly approved spot Ether ETFs in the U.S. market.

Earlier this week, amidst the buzz around spot ETH ETFs being approved Grayscale transferred over $1 billion of ETH to Coinbase, while a dormant “whale” holding $3.3 million has resurfaced, signalling potential market shifts.

This development has sent ripples through the Ethereum market, resulting in downward pressure on Eth’s price.

The SEC’s recent approval of spot Ether ETFs on July 24 was initially met with optimism, with many expecting a surge in demand for Ethereum.

However, the substantial outflows indicate that major investors might be rebalancing their portfolios or shifting their assets in anticipation of market volatility.

The net outflow of over $113 million on just the second day of trading underscores the cautious approach that investors are adopting right now.

Another factor contributing to the price pressure: Eth liquidity on exchanges has been on a steady decline. This hit a new yearly low of 20.8 million ETH.

This decrease in liquidity is significant; in the past week alone, more than 491,000 ETH, equivalent to approximately $1.7 billion, has been withdrawn from exchanges, Nansen dashboard shows.

This trend suggests that investors are either moving their assets to cold storage for long-term holding or reallocating them within different segments of the crypto market.

Despite the short-term bearish sentiment, the approval of Ethereum ETFs is a landmark decision that has the potential to reshape the market dynamics in the long run.

The initial market reaction has seen huge volatility, but many analysts remain optimistic about Ethereum’s future. Some forecasts are boldly predicting that ETH could surge to as high as $9,600, driven by increased institutional adoption.

It seems the SEC’s green light for Eth ETFs has sparked a flurry of strategic positioning among major market players.