Recent Ethereum spot ETF withdrawal trends indicate that institutional demand for Ethereum [ETH] is decreasing, putting downward pressure on the capital backing Ethereum. Withdrawals of approximately $170.21 million were recorded during three consecutive days through October 28th.
Despite this decrease in withdrawals of $88.58 million on the 26th of October to $21.41 million, it indicates the trend of selling may be slowing. However, no reversal in buying has occurred.
As ETF withdrawals continue, the total assets within these ETFs have decreased to $14.27 billion. Also, the cumulative net inflows for all ETH-based ETFs have dropped to $12.55 billion.
Fidelity’s FETH was able to provide some relief from the most recent withdrawals, while BlackRock’s ETHA contributed to them.
That said, if buying flows do not increase, then continued redemptions will likely cause the decline of institutional support for ETH. As a result, this would result in additional selling pressure.
Ethereum tests $2,280 support
In addition to ETF outflows creating additional selling pressure, ETH has been in an overall price downturn since early October, when it fell from $2,640-$2,700 to $2,400. At press time, ETH was trading at $2,309.30, down 2.02% in the last 24 hours.
After a potential rebound to $2,540-$2,560 failed to materialize, the sell-off pushed prices below $2,400 and turned former support into current resistance. ETH is now testing the area of interest near the $2,280-$2,300 zone for demand.
Lower volumes indicate less selling pressure; however, buyers remain reluctant.
The MACD lines are converging toward zero, and the histogram is very low, indicating compressed momentum ahead of a potential expansion in volatility. A close below $2,280 could lead to declines toward $2,200 or $2,120.
On the other hand, maintaining support and closing above $2,360 could signal a double bottom formation. In turn, this would lead to a renewed uptrend and a move toward $2,400.
Bitcoin ETF inflows widen Ethereum’s losses
As Ethereum’s price continues declining, rising demand for Bitcoin ETFs continues to put downward pressure on Ethereum as investors keep showing a preference for Bitcoin [BTC].
The total amount of money invested in Bitcoin ETFs rose by $423 million from the 26th to 28th of October. This difference in investment activity indicates investor preference and has kept the ETH/BTC ratio at approximately 0.0290 according to coinmarketcap data.
Withdrawals from BlackRock’s ETHA ETF have continued to reduce institutional demand for Ethereum even though Fidelity’s FETH has had some periods of inflow.
A recovery in Ethereum prices will depend on the ETF inflows returning along with strong increases in spot purchases and an increase in overall trading volumes. Increased market liquidity will help facilitate a recovery in Ethereum prices until those conditions occur.
Increased ETF outflows will be detrimental to Ethereum prices unless they stop occurring. All together, until these conditions improve, continued ETF outflows could push ETH further behind Bitcoin.
Final Summary
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Ethereum ETFs lost $170.21 million in three sessions, weakening institutional support.
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ETH risks falling to $2,200 if $2,280 support breaks, while Bitcoin ETF inflows widen ETH’s losses against BTC.