Why Is ETH Price Down Despite Record Ethereum ETF Inflows?

Along with the Bitcoin price retracement, Ethereum (ETH) witnessed a more than 5% pullback to the $3,816 level. As Ethereum eyes fresh highs, a selloff by Ethereum Foundation triggered a negative sentiment in the market. On the other hand, Ethereum ETF inflows are making fresh records, with net inflows reaching closer to $2.5 billion.

ETH Price Faces Rejection At $4,000

Ethereum bulls failed to sustain above $4000 level for long, leading to a strong pullback amid the Bitcoin price drop under $104,000. While analysts predict further upside to new all-time highs around $5,000, the ETH price has faced multiple rejections around $4,000.

One of the major reasons is the negative sentiment due to continuous sell-off by the Ethereum Foundation. According to Arkham Intelligence, the Ethereum Foundation has sold another 100 ETH, valued at approximately $420,470. This latest transaction adds to a total of 4,466 ETH ($12.62 million) sold by the foundation so far in 2024.

This year’s activity reflects a steady divestment pattern from the Foundation, which actively manages its holdings to fund ecosystem development. In the past Ethereum co-founder Vitalik Buterin has also defended these actions from the Foundation.

Another major reason behind the recent sell-off is crypto traders turning cautious ahead of the FOMC meeting and Fed rate cut decision on Wednesday. The ETH price has been consolidating in the range between $3,600-$4,000 for the past few weeks. This means that Ethereum could see another 5% retracement before reversing its trajectory.

As of press time, the Ethereum price is down 4.38% at $3,843 levels, with its market cap at $462 billion. As per the Coinglass data, the 24-hour liquidations have shot up to $56 million with nearly $50 million in long liquidations.

As per the data from PeckShield Alert, an Ethereum address (0x746c…ee8c) that had taken a long position on ETH has been liquidated for 782.48 WETH, valued at approximately $3.02 million.

Popular crypto analyst Ali Martinez believes that once Ethereum surpasses $4,100, another 50% gain to $6,000 will come like a magnet.

Ethereum ETF Inflows Show Strength

Inflows into spot Ethereum ETFs have continued at a strong pace with BlackRock Ether ETF (ETHA) leading the pack crossing $3.3 billion in net inflows since inception. The spot Ethereum ETF has witnessed a staggering surge in net inflows since November. This surge highlights growing investor interest and confidence in Ethereum-based ETFs, particularly as institutional adoption continues to gain momentum.

On Tuesday, the Ethereum ETF inflows stood at $144 million with BlackRock’s ETHA alone contributing $134 million in inflows. Fidelity’s FETH saw $3.9 million in inflows while Grayscale’s mini-Ether ETF (ETH) saw $4.5 million in inflows.

The BlackRock iShares Ether ETF (ETHA) has experienced 13 straight days of inflows, totaling $1.5 billion, according to ETF Store President Nate Geraci. Since its launch in July, spot Ether ETFs have collectively seen $2.5 billion in inflows, despite a net outflow of $3.5 billion from the Grayscale ETH Trust during the same period.

Investors are hopeful for an ETH price surge following the massive inflows into ETFs. Analyst Venturefounder has identified a critical threshold in Ethereum’s journey, highlighting the 0.036 ETH/BTC ratio as a pivotal level. A bounce back from here sets the stage for the ETH price rally to continue.

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Bhushan Akolkar

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.