Ethereum Price Dips 20% Under ETFs $115M Sell-Off: What’s Next?

Ethereum Price Analysis

Ethereum price dipped below the $3,000 mark on Aug 3, reflecting a 20% weekly timeframe decline, on-chain analysis explores how ETH ETF outflows influenced the last week’s price action and what to expect in the week ahead.

Ethereum Posts 20% Losses for The Week

Last week, Ethereum made a positive start along with the rest of the crypto markets. Thanks to bullish headwinds from Donald Trump’s comments at the Bitcoin Nashville 2024 Conference held between July 25 and July 27, ETH price raced to the weekly time frame peak of $3,396 by Monday, July 29.

However, as the media buzz surrounding Trump’s bullish comments waned, underlying bearish catalysts within the ETH markets became more prominent.

Looking at the chart above, Ethereum price has been in a steep downtrend, since the local top recorded on Monday. At the time of publication Aug 4, ETH is now trading below $2,865, reflecting a 20% drop-off within the last 5 days.

Ethereum ETFs Bleed $115M in Capital Outflows

Ethereum’s struggle for traction has mirrored the broader crypto market trend which saw over 300 million liquidated towards the end of the week. The downward trend was mainly influenced by the change in macro economic landscape after the US Fed opted against cutting interest rates.

However, on-chain data shows that Ethereum’s 20% loss performance was further amplified by capital outflows from ETH spot ETFs.

According to data compiled by TheBlock, the 9 newly launched ETFs recorded a total of $115 million net outflows between July 29 and Aug 1.

Ethereum ETFs have struggled to find their footing in the second consecutive week of trading, sparking fears that complications around staking and regulations, makes them less attractive to investors compared to Bitcoin ETFs.

For context, Bitcoin ETFs had recorded over $500 million in their first-full week of trading back in January.  If investors’ skepticism surrounding Ethereum ETFs persists in the week ahead, ETH price could be at risk of further downswings toward the $2,500 level.

Ethereum Price Prediction: ETF Outflows Could Spark $2,500 Reverse

Ethereum’s price has been under significant pressure recently, primarily driven by a series of ETF outflows and broader market downturns. As of the latest analysis, Ethereum (ETH) is trading at approximately $2,829, marking a notable decrease of 2.45% for the day. The bearish sentiment appears to be gaining momentum, as highlighted by the technical indicators.

The chart reveals a clear downward trend, with ETH price consistently registering lower highs and lower lows.

The True Strength Indicator (TSI) underscores this bearish momentum, with both the blue and red lines positioned well below the zero line, indicating strong selling pressure.

Additionally, the fractals on the chart suggest that the recent support levels have failed to hold, further amplifying the bearish outlook.

If this trend continues, Ethereum could see a further decline towards the $2,500 support level. This key support level is critical as it represents a psychological barrier and a historical support point. Should the price break below this level, it could trigger a more substantial sell-off. On the resistance side, the nearest level to watch is around $3,000, which, if breached, could provide some respite to the bulls.

In conclusion, the current technical indicators suggest that Ethereum’s price is poised for further downside, with ETF outflows exacerbating the situation. The $2,500 support level will be crucial in determining the next move, and traders should watch for any signs of reversal or further bearish momentum.