Ethereum Faces Steeper Decline Than Bitcoin Despite Anticipated ETF Launch

Analysts Weigh In on ETF Impact
ETH Drops More Than BTC
Technical and Market Factors
Conclusion

Ethereum [ETH] has faced a significant downturn, shedding over $500 since July 1, dropping from $3.4K to a low of $2.8K. This decline has erased gains made after the partial approval of an ETF in May. Despite the anticipation of an ETF launch by mid-July, Ethereum has not been spared from the market rout.

Analysts Weigh In on ETF Impact

Ethereum educator Sassal remains optimistic, stating there is "no bearish" factor apart from potential outflows from Grayscale’s ETH trust, ETHE. Sassal noted, "This entire run has now been retraced since the ETFs got approved on May 23rd…The main overhang for ETH right now, in my opinion, is the possible Grayscale ETHE outflows." He also mentioned possible regulatory clarity and likely Fed rate cuts in late 2024 as positive factors.

ETH Drops More Than BTC

Despite these optimistic views, Ethereum has dropped harder than Bitcoin. As of now, BTC is down about 11% weekly, while ETH has declined 14%. This disproportionate decline has puzzled traders, especially with the expected ETH ETF launch in two weeks. Market observers suggest that ETH’s significant drop could be due to a lack of a strong narrative and potential ETHE outflows. User Evans noted, "Everyone fears grayscale unlock (more impactful in low-volume summer). The market is risk-off, and everyone expects little to no demand for ETH out of the gate."

Technical and Market Factors

The recent pullback in ETH hit the 61.8% Fibonacci retracement level ($2.8K), which also acts as a crucial support level. Whether this support holds may depend on Bitcoin’s next move. Additionally, the bearish sentiment is further evidenced by negative outflows in the derivatives market, with ETH seeing net outflows totaling $4.5 billion since July 1, per Coinglass data.

Conclusion

The anticipated ETF launch has not provided the bullish momentum expected for Ethereum. The market's risk-off approach, coupled with potential Grayscale outflows, continues to weigh heavily on ETH, leaving its near-term prospects uncertain.

Disclaimer: The views and opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Ethereum Faces Steeper Decline

Sujit Kumar

Sujit received his Bachelors in Science from the LNMU Darbhanga. He is currently working as a Content Strategist. He has more than three years of professional experience in information systems, security policies, technologies, and Cryptocurrency. He has published 6 books in the area of information security and assurance. He has published more than 50 research articles in leading journals Regarding the Latest and Breaking Crypto News and updates. His research interests include access control, computer forensics, Digital Marketing, Web development, business hacks, player experience, and virtual storytelling.