Ethereum ETF Outflows Hit $77M After Fed Rate Pause, What’s Next?

On Wednesday, July 31, eight Spot Ethereum ETFs experienced another substantial outflow of $77.2 million. This marks a continued trend of negative flows despite the rebound on Tuesday. Moreover, these outflows signal a bearish sentiment as the Federal Reserve decided to keep interest rates unchanged.

Ethereum ETF Outflows Surge

Grayscale’s Ethereum Trust (ETHE) faced the most significant outflows, losing $133.3 million. This brings its total to nearly $2 billion in just seven trading days. Furthermore, this decline was mirrored in the price of Ethereum, which dropped from $3,340 to the $3,100 level.

Among the different ETFs, BlackRock’s Ethereum ETF (ETHA) managed to see a modest inflow of $5 million. In contrast, Franklin Templeton’s FETH stood out with the highest inflow of $18.8 million for the day. VanEck’s ETHV and Bitwise’s ETHW also recorded inflows of $4.8 million and $4.7 million, respectively.

Despite these positive movements, the cumulative net outflow for eight Spot Ethereum ETFs over seven trading days has reached a staggering $483.6 million. These outflows occurred in conjunction with the Federal Open Market Committee (FOMC) decision to maintain interest rates at 5.50%.

Also Read: Bitcoin Liquidations Surge to $56 Million Soon After Fed Meeting, What’s Happening?

Ethereum Foundation Selloffs

Adding to the market’s uncertainty, data from Arkham Intelligence revealed that an Ethereum Foundation-associated address (0xd7…c1f4) is selling ETH. On Wednesday, it sold 150 ETH via the Cow Protocol, exchanging it for 497,250 DAI. Moreover, it is part of a consistent pattern observed since the beginning of the year. This address has been regularly selling Ethereum for DAI in amounts ranging from 50 to 200 ETH every few weeks.

The Ethereum Foundation’s selling activity has been particularly intense recently. On July 26, blockchain analytics firm Lookonchain reported that an Ethereum Foundation wallet transferred 92,500 ETH, worth approximately $294.9 million, to a new wallet. This move was the first significant transfer for this wallet in nearly 6.6 years. This added to the market volatility amid Spot Ethereum ETF launch.

Moreover, on July 23, the Ethereum Foundation sold 100 ETH for 345,179 DAI. This transaction coincided with the launch of Spot Ethereum ETFs, fueling speculation about the impact of these sales on the market. The Foundation’s continued sell-offs have sparked discussions about the potential downward pressure on the ETH price.

What’s Next For ETH?

Previously, an ETH price analysis by Coingape suggested that losing support at $3,300 could indicate a shift in market sentiment. This could potentially leading traders to consider short positions on Ethereum. The Moving Average Convergence Divergence (MACD) indicator is also being closely watched for sell signals as it approaches the neutral line.

At press time, the ETH price fell 4.56% to $3,162 on Thursday, August 1. Hence, losing the crucial support at $3,300 indicates a further downtrend. Moreover, according to Coinglass, Ethereum saw a whopping $53.84 million long liquidations in the last 24 hours. This could also have catalyzed the dip today.

Looking ahead, QCP Capital anticipates continued outflows from Grayscale’s ETHE over the next two weeks. Despite this, they recommend a preference for ETH long positions as ETHE outflows stabilize and ETH price catches up to Bitcoin. Furthermore, QCP Capital has set a target of breaking above $4,000, which represents the 2024 high.

Also Read: BlackRock vs VanEck: Solana ETF Takes Center Stage In This Epic Battle