Ethereum’s price has undergone significant selling pressure over the past week, reflecting the current climate of the crypto market. The latest data shows that US-based Ethereum ETFs (exchange traded funds) were not faring any better as significant capital flowed out of the market over the past week.
Weekly outflows from Ethereum ETFs exceed $600 million
In a Quicktake post on the CryptoQuant platform, market expert CryptoOnchain says revealed an overwhelming exodus of institutional capital from the Ethereum market. More specifically, the analyst highlighted that more than $600 million in capital has flowed out of the US-based spot Ethereum ETFs in the past week.
The relevant indicator here is the ETH ETF Net Flow metric, which monitors the net capital movement (in millions of USD) into or out of the Ethereum exchange-traded fund market.
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BlackRock’s iShares Ethereum Trust (with the ticker ETHA) is the main contributor to the massive outflows that Ethereum ETFs have seen over the past week. CryptoQuant’s data shows that approximately $470 million in value was extracted from ETHA in the past trading week.
Fidelity’s Ethereum Fund (ticker: FETH) also recorded a notable amount of net outflows as investors withdrew approximately $35 million. Grayscale’s Ethereum ETF (ETHE) also posted significant net outflows of approximately $49 million over the past week.
What the outflow means for the Ethereum price
Under normal circumstances, the Ethereum ETFs typically provide significant price stability and institutional support for the ETH price. However, these products can also be a source of enormous volatility in the market, depending on their investor behavior.
Typically, waves of ETF outflows indicate a reduction in institutional risk appetite for Ethereum. CryptoOnchain explained that when the week starts with reduced exposure from institutional participants, their not-so-optimistic sentiment becomes evident in the market, while prices also fall. The lack of institutional demand could, in turn, make it difficult for Ethereum to defend its immediate support levels.
Furthermore, this could mean that institutional interest is at a price level further south of the Ethereum price. This creates a demand vacuum below current price levels that short-term traders generally find difficult to fill.
Until ETF flows start rising to positive values, the Ethereum market could face more bearish pressure. It then becomes very likely that the ‘king of altcoins’ will revisit the lower support levels.
Therefore, it is important that investors enter the market with the utmost caution. At the time of writing, Ethereum is valued at around $2,975, with no significant price movements over the past day.
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Featured image from Shutterstock, chart from TradingView