The anticipated approval of Spot Ethereum (ETH) Exchange-Traded Funds (ETFs) did not result in the expected rally for ETH and other altcoins. Investors were hopeful for a different outcome, but there remains potential for an ETH rise following the approval of Bitcoin (BTC) ETFs. Recent ETF data is showing promising trends.
Spot ETH ETF Developments
After two weeks, Spot ETH ETFs experienced positive net inflows for the first time. Out of nine different ETH ETFs, Grayscale’s ETHE had consistent net outflows similar to their GBTC counterpart. Earlier predictions indicated that the sales for GBTC would soon taper off, and Grayscale officials confirmed that the steady sales have indeed ceased.
Although ETHE sales outpaced GBTC, the negative market sentiment contributed to the outflows. Since August 14, ETHE outflows have slowed, leading to the first net inflow in the ETH ETF channel. Ether ETFs, which were introduced on July 23, witnessed $2.5 billion in net outflows during their first month.
Future of ETH Price
Since the launch of ETH ETFs, the price of ETH has dropped by 25%. On the day of the ETF approval last month, ETH’s price peaked at $3,441 but has since fallen to around $2,560. Nevertheless, the annual price has increased by 13%.
By mid-February, 75% of new BTC investments were funneled through the ETF channel. If net inflows continue in the ETH ETF channel, increased demand might trigger a new phase of price growth. Nansen analyst Aurelie Barthere identifies $2,700 as a significant resistance level.
Key Investor Insights
Concrete and valuable insights for investors include:
- Monitoring the $2,700 resistance level to gauge potential price movements.
- Understanding that surpassing this resistance could result in liquidating $362 million in short positions.
- Recognizing the potential for significant price increases if demand strengthens or if there is a rapid BTC rally.
Coinglass data suggests that surpassing the $2,700 resistance would clear a vast amount of short positions, intensifying the risk for short sellers. If market stagnation ends, ETH could see movements above $3,000 by October. However, a quicker rise would require stronger demand in the ETH channel or a sudden BTC rally.
