Ether’s sluggish price action is driven more by a lack of investor interest than by the ongoing outflows from spot Ether exchange-traded funds (ETFs).
Ether (ETH) price fell over 26% since the launch of the US spot Ether ETFs, which debuted for trading on July 23, recording a cumulative $420.5 million worth of net outflows since launch.
However, Ether’s price isn’t struggling due to the continued ETF outflows, but due to a lack of risk-on appetite among investors, according to Aurelie Barthere, principal research analyst at Nansen onchain analytics platform.
The research analyst told Cointelegraph:
“BTC has been down by 14% since July 23. My reading is tiredness in risk appetite, non-related to the ETF launch.”
Initially, investors anticipated a significant price increase from the launch of the Ether ETFs. For Bitcoin (BTC), ETFs accounted for about 75% of new investment in the cryptocurrency by Feb. 15 as it surpassed the $50,000 mark.
ETH/USD, 1-month chart. Source: TradingView
However, Ether’s price declined over 26% to trade at $2,587 at 12:14 pm UTC on Aug. 19, down from $3,500 on July 23, when the US Ether ETFs were approved.
The latest crypto sell-off was due to traditional US equities
The crypto industry is still recovering from an over $510 billion crypto sell-off, which wiped out most of the 2024 gains of the 50 largest cryptocurrencies, taking both Bitcoin and Ether prices to five-month lows.
However, the sell-off was not crypto-specific but driven by the wider equities sector, explained Nansen’s Barthere:
“We know that the first sell-off in March led to realized losses, especially among traders engaged in many crypto narratives. Then a second sell-off, in correlation with equities, occurred in July - August. This is in the context of still solid but slowing US growth and stretched valuations in traditional risk assets like US equities.”
A host of other factors contributed to the crypto sell-off, including the Bank of Japan raising its interest rate from 0% to 0.25% on Aug. 5.
Meanwhile, five of the top market makers have sold a total of 130,000 Ether worth $290 million at current prices since Aug. 3, while Ether’s price crashed from $3,000 to below $2,200.
End of the bull market or temporary crypto consolidation?
The subdued cryptocurrency prices could either indicate a temporary correction or the end of the current bull market.
This will largely depend on the Federal Reserve’s upcoming monetary policy decisions, explained Barthere:
“To me, it is still unclear if we are just taking a consolidation pause or if crypto prices have peaked. If the Fed can cut while growth holds, the bull market in crypto and equities will likely continue. If we get any sharper deceleration in growth, there will be less upside for risk assets."
Yet, others believe that the current crypto bull market will carry on until the third quarter of 2025. Notably, Bybit and BlockScholes expect Bitcoin’s bull run to extend another 350 days, based on the current trough-to-peak ratio, which analyzes the price tops and bottoms printed by an asset.
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