Ethereum (ETH) price closed last week on a bearish note after a rebound fueled by the approval of spot Ether ETFs.
Ongoing cash outflows from US-based spot Ether ETFs, particularly Grayscale’s ETHE, have weighed on the Ethereum bullish sentiment.
The crypto industry is likely to be trapped in a bearish outlook in August.
Ethereum (ETH) concluded last week on a bearish note, despite a notable rebound triggered by the recent approval of spot Ether exchange-traded funds (ETFs).
The large-cap altcoin, boasting a fully diluted valuation of approximately $407 billion and a daily average traded volume of around $11.1 billion, has managed to establish a solid support range between $2,928 and $2,831 over the past five months.
Declining Demand for Ethereum Weighs on Bullish Sentiment
The bullish sentiment surrounding Ethereum has been significantly dampened by the ongoing cash outflows from US-based spot Ether ETFs. According to current data, these ETFs have registered a net cash flow of about $341 million.
Despite the notable cash inflows observed in other spot ETH ETF issuers, Grayscale’s ETHE stands out as a cause for concern, with over $7 billion in net assets under management.
There is a high likelihood that these assets will be dumped in the coming months, potentially exerting further downward pressure on Ethereum’s price.
On-chain data provides insights into the behavior of large entities holding Ether, with some beginning to dump the altcoin in an effort to preserve profits and capital.
One notable example is a giant whale that has recently been depositing substantial amounts of Ether into various centralized exchanges, signaling a possible capitulation.
A giant whale deposited 25.8K $ETH ($87M) to #Binance just now!Notably, this whale withdrew 26,721 $ETH from Binance at ~$3,457 from May 31 to Jul 25;And has deposited 26,660 $ETH to the CEX at only ~$3,376 on Jul 17 and 29.The est. total loss from $ETH is $2.16M (-2.34%).… pic.twitter.com/vjkE912IWj
— Spot On Chain (@spotonchain) July 29, 2024
This trend of whales offloading their Ether holdings could further contribute to the bearish sentiment surrounding the cryptocurrency, as increased selling pressure may lead to a decline in price.
As July comes to a close on a bullish note, historical data suggests that the crypto industry may be trapped in a bearish outlook throughout August. Moreover, it is unlikely that the U.S. Federal Reserve will initiate interest rate cuts on August 31, following the lead of China, the European Union, or the Bank of Canada.
