Ethereum’s price has been under significant selling pressure over the past week, reflecting the current cryptocurrency market climate. The latest data shows that the situation was no better for American spot Ethereum ETFs (exchange-traded funds), as significant capital flowed from the market last week.
Weekly outflow of Ethereum ETFs exceeds $600 million
In the Quicktake post on the CryptoQuant platform, an expert from the CryptoOnchain market revealed an overwhelming exodus of institutional capital from the Ethereum market. More specifically, the analyst highlighted that over $600 million of capital flowed out of US Ethereum spot ETFs last week.
The relevant indicator here is the ETH ETF Net Flow Rate, which monitors the net capital flow (in USD millions) into or out of the Ethereum ETF market.
BlackRock’s iShares Ethereum Trust (ticked ETHA) is a major contributor to the massive outflows Ethereum ETFs witnessed last week. CryptoQuant data shows that approximately $470 million was withdrawn from ETHA in the last trading week.
Fidelity’s Ethereum Fund (symbol: FETH) also saw a significant amount of net outflows as investors withdrew approximately $35 million. Grayscale’s Ethereum ETF (ETHE) also saw significant net outflows of around $49 million last week.
What the outflow means for Ethereum price
Under normal circumstances, Ethereum ETFs typically provide significant price stability and institutional support for the ETH price. However, these products can also be a source of enormous market volatility, depending on investor behavior.
Typically, waves of ETF outflows indicate a decline in institutional risk appetite for Ethereum. CryptoOnchain explained that when the week starts with reduced exposure from institutional participants, their less-than-optimistic sentiment becomes observable in the market as prices decline. The lack of institutional demand could, in turn, make it tough for Ethereum to defend immediate support levels.
Moreover, this could mean that institutional interest lies at a price level further south of Ethereum’s price. This creates a demand vacuum below current price levels that short-term investors may generally struggle to fill.
Until ETF flows begin to move towards positive values, the Ethereum market may come under more bearish pressure. Therefore, it becomes very likely that the “king of altcoins” will visit lower support levels again.
Therefore, it is critical for investors to engage in the market with extreme caution. At press time, Ethereum is trading at around $2,975, with no significant price changes over the past day.
Featured image from Shutterstock, chart from TradingView
