Why is demand for ETH lacking post-Ethereum ETF?
Ethereum (ETH) is about to close the month of July despite the launch of spot Ethereum ETFs in the United States.
US spot Ethereum ETFs went live on July 23, and the market's immediate reaction was a 9% decline. Currently, ETH price is down 4.05% since launch. However, other factors may have inhibited price performance.
ETHE is seeing a faster flow than GBTC.
The overall ETF numbers were very weak, with total net income currently negative at $439.64 million, Sosovalue said.
The chart below shows that most of the sales pressure was defeated by grayscale spending. All other major ETH ETFs, including BlackRock, Bitwise and Fidelity, have recorded positive daily gains since July 29.
It was also noted that Grayscale performed ETA flows faster than GBTC did after Bitcoin (BTC) ETFs launched in January. The table below shows the net asset losses after conversion for both investment vehicles.
As Cointelegraph reports, some analysts say the massive outflow from grayscale ETHE may slow down this week.
“There is simply no interest” in ETH exchanges.
Additionally, withdrawal transactions for Ethereum exchanges have decreased significantly since March. This measure is highly correlated with price, which “simply lacks interest,” according to independent analyst Crypto Lion.
The estimated leverage ratio, or LR, has driven ETH's price action during this volatile period, argues Crypto Lion. This measure refers to the ratio of open interest in futures contracts to the balance of the corresponding exchange. A high ELR indicates that futures/purps are leading the price action, which is usually short-term or cut-off. he said.
ETH price will move as a range after ETH ETF approval. However, with no exit and ELR not yet resolved, it is advisable to avoid buying.
Coinbase Premium Index reverses negative
Coinbase data suggests a similar lack of interest. The Coinbase Premium Index is strongly declining in Q2 2024. It peaked in March at the same time as ETH for the year but is currently in negative territory. A negative premium indicates that US investors lack buying pressure, indicating a drying up of demand for space.
The possible adoption of an Ethereum ETF in May 2024 has increased spot buying on Coinbase, which has had a significant impact on its price. The Coinbase Premium Index rose above 0.15, indicating interest from ETH spot buyers. As mentioned above, the same indicator is now decreasing, which has the opposite effect on the price of ETH.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
