Why Is ETH Price Down Despite Record Ethereum ETF Inflows?

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As a seasoned researcher with over two decades of experience in the financial markets, I have witnessed countless bull and bear cycles. The current state of Ethereum is intriguing, to say the least.

In my role as a researcher, I’ve observed an intriguing trend regarding Ethereum (ETH). As Bitcoin‘s price dipped, Ethereum also experienced a significant drop, reaching the $3,816 mark, representing over 5% pullback. Interestingly, a selloff by the Ethereum Foundation seems to have stirred a wave of pessimism in the market. However, it’s worth noting that this is countered by an upward trend in Ethereum ETF inflows, which are currently breaking records, with net inflows nearly reaching $2.5 billion. This dynamic underscores the ongoing interest and confidence in Ethereum among investors.

ETH Price Faces Rejection At $4,000

The price of Ethereum couldn’t stay above $4,000 for too long due to a significant decrease, which was also triggered by Bitcoin falling below $104,000. However, analysts believe there could be more growth leading to new record highs around $5,000. Unfortunately, the Ethereum price has been repeatedly turned down at the $4,000 mark.

As a researcher delving into the Ethereum ecosystem, one striking observation I’ve made is the potential impact of recurrent sell-offs by the Ethereum Foundation. According to Arkham Intelligence, the Ethereum Foundation has recently disposed of another 100 ETH, equating to approximately $420,470. This latest move adds to a cumulative total of 4,466 ETH ($12.62 million) sold by the foundation this year alone in 2024.

2019’s activities demonstrate a consistent strategy by the Foundation of gradually selling off its assets, with the aim of financing ecological growth. Previously, Vitalik Buterin, one of Ethereum’s co-founders, has supported these decisions made by the Foundation.

One key factor contributing to the recent drop in crypto prices is traders becoming more cautious as they await the Federal Open Market Committee (FOMC) meeting and the Fed’s interest rate decision, which takes place on Wednesday. Over the last few weeks, the price of Ethereum has been fluctuating between $3,600 and $4,000, suggesting that it may experience a further 5% decrease before potentially changing direction.

At this moment, Ethereum’s price stands at approximately $3,843, marking a decrease of 4.38%. The total market capitalization is currently estimated at around $462 billion. According to Coinglass data, the volume of liquidations within the past 24 hours has spiked to $56 million, with almost $50 million being attributed to long positions being closed out.

According to information from PeckShield Alert, an Ethereum account identified as (0x746c…ee8c) that had invested in a long position on ETH has been forced to sell its holdings for around 782.48 Wrapped Ether, which is roughly equivalent to $3.02 million.

According to well-known cryptocurrency expert Ali Martinez, if Ethereum manages to exceed the price of $4,100, it’s likely that its value could increase by an additional 50%, reaching around $6,000, much like a powerful magnet attracting more.

Ethereum ETF Inflows Show Strength

Investments into the Ethereum Exchange-Traded Fund (ETF) have maintained a robust flow, with BlackRock’s Ether ETF (ETHA) leading the charge and amassing approximately $3.3 billion in net inflows since its launch. The Ethereum spot ETF has experienced an impressive increase in net investments since November, reflecting a growing curiosity and conviction among investors concerning Ethereum-focused ETFs. This uptick in interest coincides with the escalating adoption of these funds by institutions.

On Tuesday, the Ethereum Exchange-Traded Fund (ETF) had a total inflow of approximately $144 million. BlackRock’s ETHA accounted for around $134 million of this influx, while Fidelity’s FETH saw an additional $3.9 million and Grayscale’s mini-Ether ETF (ETH) had $4.5 million in inflows.

Over the past 13 days, the BlackRock iShares Ether ETF (ETHA) has received approximately $1.5 billion, as reported by ETF Store President Nate Geraci. Since its debut in July, combined spot Ethereum ETFs have attracted $2.5 billion, while the Grayscale ETH Trust has seen a net outflow of $3.5 billion during the same timeframe.

As a crypto investor, I’m feeling optimistic about the potential increase in ETH prices due to the significant inflows into Ethereum-focused ETFs. Analyst Venturefounder has pinpointed an important milestone in Ethereum’s trajectory, suggesting that the 0.036 ETH/BTC ratio could be a crucial turning point. If Ethereum rebounds from this level, it could pave the way for the ongoing ETH price surge to gather momentum.

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2024-12-18 12:12