Selling Ethereum ETF shows more difficulty – 10x research
The long-awaited launch of spot ether exchange-traded funds (ETFs), which brought optimism to the market, saw a rapid sell-off and subsequent drop in the price of ether.
According to the latest 10x Research report, this selling trend closely follows a common pattern seen in previous crypto ETF launches, including spot bitcoin (BTC) ETFs.
Speaking to Cointelegraph, Markus Thielen, founder of 10x Research, explained that many traders “estimated that Ethereum ETFs account for 20% of Bitcoin ETF revenues.”
“However, they ignore the potential for billions of dollars in grayscale and exchange listings to trigger a ‘news-selling' response. Also, the crypto market is entering a period of weakness.
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Market response
The approval and launch of spot Ether (ETH) ETFs coincided with a mountain of initial BTC distributions from Gox, fueling the fire as selling pressure mounted in the market.
According to 10x Report, Greyscale's $9 billion Ethereum Trust experienced massive inflows — $481 million in the first day and $326 million in the second.
In contrast, other ETF issuers, such as Bitwise, raised $204 million on their first day, mostly from venture capital firm Pantera Capital.
Although this indicates mixed sentiment in the market, Pantera's rapid sell-off reflects a lack of confidence in the “seed investment” for sustainable growth, the report said.
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Ethereum vs. Bitcoin ETF
The report describes a bearish outlook on Ether, indicating that the much-anticipated ETF was overbought ahead of its launch.
“Ethereum may be the weakest link, where the fundamentals (new users, revenue, etc.) are stagnant or less.”
ETH price is down 8% in the last 24 hours as the price stabilizes around $3,181 following market volatility.
Despite the 10x report BTC enjoys “digital gold” status, Wall Street traders struggle to define ETH's unique value.
“While technology investments are often risky, Wall Streeters often don't make bets on things that aren't worth it.”
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Is Solana Eating Ethereum?
According to a July 23 report, 10x Research showed a Stott indicator showing ETH at a high level, suggesting a possible market high.
“A reading above 90% is often associated with a correction, while a level below 15% indicates a low price to buy. At the current reading of 87% (from 92%), Ethereum is heading for a low.”
The report also highlights the release of memecoin to the Solana blockchain “but not ETH” as a change from ETH to Solana (SOL).
The report warns investors that further declines may follow, from Mit Gox, the upcoming US earnings season, and “weak periods for August and September.”
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