- Ethereum (ETH) price is experiencing a significant downtrend despite the historic launch of the first Ethereum-based Exchange Traded Funds (ETFs) in the United States.
- Contrary to expectations, the debut of Ethereum ETFs has not bolstered the token’s value. Data from Farside Investors shows a net outflow of $420.5 million from the U.S. ETH ETFs during the launch period, creating substantial selling pressure.
- Investors had anticipated a notable price increase following the launch, similar to Bitcoin ETFs, which saw about 75% of new crypto investments by February 15, causing Bitcoin’s price to surge past $50,000.
Ethereum’s price faces significant downward pressure despite the recent launch of Ethereum-based ETFs in the U.S., driven by large outflows and increased supply. Learn more about the current landscape and future outlook.
Significant Outflows from Ethereum ETFs
The eagerly awaited arrival of Ethereum ETFs in the U.S. did not generate the bullish impact many had predicted. According to Farside Investors, since the launch, there has been a substantial net outflow of $420.5 million from these ETFs, putting immense selling pressure on the cryptocurrency. This reaction starkly contrasts with the Bitcoin ETF launches, which saw a massive influx of new investments.
Increased Ethereum Supply
Another critical factor contributing to Ethereum’s price drop is the increasing supply. From July 23, when the spot Ethereum ETFs were introduced in the U.S., the Ethereum supply has increased by 60,555 ETH, amounting to over $155 million. Data from Ultrasound.money indicates that the annual issuance rate has climbed to 940,000 Ether, with a burn rate of 203,000 Ether, leading to an annual supply increase rate of 0.61% over the past 30 days.
The Impact of the Dencun Update
The Dencun update, Ethereum’s most significant upgrade since the Merge, went live on March 13, promising to reduce transaction fees on layer-2 networks and enhance overall scalability. However, an on-chain analysis from CryptoQuant shared on August 19 reveals that Ethereum’s price has struggled since the Dencun update. Despite the approval of Ethereum ETFs, ETH’s price has dropped by 35%, with the supply increasing by over 197,000 ETH.
Future Price Predictions
Looking ahead, popular crypto trader Ted predicts a potential breakout for Ethereum in the first quarter of 2025. Based on historical chart patterns, Ted suggests a period of consolidation will end around November/December 2024, followed by a parabolic price surge early the next year. While this forecast hinges on past trends, it could offer a glimmer of hope for investors.
Conclusion
In summary, Ethereum finds itself under considerable pressure from significant outflows following the ETF launches and a rising supply. Despite the promising upgrades like Dencun, the token’s price has yet to recover. The upcoming months will be crucial for Ethereum as it navigates these challenges, with potential bullish movements anticipated towards late 2024 and early 2025. Investors should closely monitor these developments to make informed decisions.
