What is the future of Ethereum after ETH erases gains “pre-ETF approval”?

Despite the possibility of an ETF launch in mid-July, ETH has not been immune to the ongoing market crash.

Since July 1, Ether has fallen more than $500, from $3,400 to a low of $2,800, erasing all gains made after the partial ETF approval in May.

However, ETH educator Sassal claims that there are no “bearish” factors except for possible outflows from Grayscale’s ETH Trust ETHE.

Considering that the ETH ETF is expected to launch in two weeks, this disproportionate drop is unprecedented and has confused some traders.

ETH’s plunge is due to the lack of a strong narrative. The market is in a risk-off state, and potential outflows may weaken the expectations of the ETH ETF.

“Everyone is worried about Grayscale unlocking (more impact in the summer when trading volume is lower). The market is in a risk-off mode and everyone expects little to no demand for ETH.”

Meanwhile, the ETH pullback hit the golden area of ​​61.8% Fibonacci retracement based on the 2024 lows and highs.

The 61.8% Fibonacci level ($28,000) doubles as the daily order block (marked in cyan) and is a key support level in the first half of 2024. Whether the support level can hold may depend on BTC’s next move.

However, negative outflows in the derivatives market further emphasize traders’ risk-off attitude.

Since July 1, ETH’s net outflow has reached a total of $4.5 billion, highlighting the bearish sentiment and the possible tepid response to the ETF launch.

However, a recent report from Bloomberg pointed out that crypto market sentiment is only likely to improve if the Federal Reserve turns dovish and implements “one or two rate cuts.”