On the 2nd of October, the U.S. Securities and Exchange Commission (SEC) approved Cboe BZX’s proposal for a new Volatility Shares 3x Ether ETF alongside five other similar products.
The SEC approved the proposed rule changes allowing these funds to be listed on Cboe BZX but did not approve their initial trade.
Volatility Shares’ 3x Ether ETF will have the ability to amplify all positive and negative price movement in Ether [ETH] futures by up to three times.
Since this is an unleveraged daily reset product, volatile swings can cause returns to diverge sharply from three times ETH’s longer-term performance.
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Source: SEC
Furthermore, Futures-based leveraged products carry rollover costs as the underlying contracts are repeatedly bought and sold at higher prices. They can also experience tracking errors compared with Spot ETH.
It is possible that a high-demand product such as this may lead to increased short-term trading activity as well as rebalancing activity after it launches. However, trading still requires the S-1 registration to become effective.
However, until the product has completed its S-1 registration process, trading cannot occur.
Ethereum ETF demand weakens
However, despite the announcement, the ETF flows didn’t seem impressed. Instead, the data recorded more outflows on the product.
Negative flows continued dominating for four consecutive days, accelerating from $59.58 million on the 30th of September to $55.37 million on the 1st of October, before reaching $37.36 million on the 2nd of October.
The four-day reversal removed $155 million after September’s inflow streak. This simply implies that the investors have not shifted toward ETH exposure despite the leveraged route.
On the other hand, ETF assets were not immune from the drawdown, as they slipped from $17.92 billion on the 22nd of September to $17.46 billion, shedding a whopping $460 million.
This was the same range recorded on the 18th of September, when the outflows hit $407 million. That divergence matters because high turnover is not translating into demand.
Therefore, the 3x approval has yet to improve institutional flows, leaving ETH more dependent on spot and derivatives demand and potentially increasing sensitivity to redemptions.
ETH stays above $2,700
Despite the massive outflows, ETH structure is holding above $2,700 because buyers are absorbing the selling near the middle of a broader range. After nearing reaching $2,777 on the 2nd of October, the price retraced toward the $2,625 support zone before recovering.
That reaction shows demand remained strong enough to defend the $2,625–$2,650 area. However, buyers have struggled to turn that defense into a sustaining breakout. Each push toward $2,750 has met renewed selling, which in turn kept the altcoin below the $2,800–$2,825 ceiling.
Meanwhile, RSI near 52 shows momentum has cooled without becoming bearish. Therefore, the range remains intact, but the pressure is building on both sides. A break above $2,800 could restore momentum toward $3,000, while losing $2,625 would weaken the recovery and expose lower support.
Final Summary
- Ethereum holds above $2,700 despite $152.31 million in ETF outflows, showing resilient underlying demand.
- ETH needs $2,800 to break higher, while continued ETF redemptions could weaken the recovery.