Author: Biraajmaan Tamuly, CoinTelegraph; Translated by: Wuzhu, Golden Finance

Despite the launch of a spot Ethereum ETF in the United States, ETH is about to close in the red, down about 1%.

The US spot Ethereum ETF went live on July 23, and the market immediately reacted by falling 9%. Currently, the ETH price has fallen 4.05% since its launch. However, other reasons may have hindered price performance.

ETHE's capital outflow is faster than GBTC

According to Sosovalue, the overall figures for ETFs have been disappointing, with cumulative net inflows now totaling negative $439.64 million.

The chart below highlights that most of the selling pressure has been centered on Grayscale. As of July 29, all other major spot ETH ETFs, including BlackRock, Bitwise, and Fidelity, have recorded positive daily inflows.

US ETH spot ETF tracking. Source: Sosovalue

We also observe that Grayscale’s ETHE has seen faster outflows than GBTC since the launch of its spot Bitcoin ETF in January. The chart below highlights the asset losses of both investment vehicles since the conversion.

Chart of GBTC and ETHE asset losses since conversion. Source: Glassnode

Some analysts say Grayscale’s massive ETHE outflows will “most likely” end this week.

Exchanges have “no demand at all” for ETH

In addition, Ethereum exchange withdrawal volume has fallen sharply since March. Independent analyst Crypto Lion said this metric is highly correlated with price, indicating that "there is simply no demand."

Ethereum exchange withdrawal transaction chart. Source: Cryptoquant

Crypto Lion believes that the estimated leverage ratio (ELR) has driven ETH’s price action during this volatile period. This metric represents the ratio of open interest in futures contracts to the balance on the corresponding exchange. A higher ELR indicates that futures/perps are leading price action, which is usually short-lived or volatile.

After the ETH ETF was approved, the ETH price fluctuated in a range. However, in the absence of a Withdraw, it is recommended not to buy even though the ELR has not been resolved.

Coinbase Premium Index turns negative

Coinbase data hints at a similar lack of demand. The Coinbase Premium Index for ETH has been strictly declining in the second quarter of 2024. The index peaked in March at the same time as ETH's year-to-date high, but is currently negative. Negative premium values ​​indicate a lack of buying pressure from U.S. investors and a drying up of spot demand.

Ethereum Coinbase Premium Index. Source: Cryptoquant

In May 2024, the potential approval of an Ethereum ETF increased spot buying on Coinbase, which had a bullish impact on its price. The Coinbase Premium Index also surged above 0.15, indicating demand from ETH spot buyers. As mentioned above, the same indicator is now falling, which has an opposite effect on ETH prices.