The cryptocurrency market is experiencing turbulence as Ethereum (ETH) takes a major hit.
ETH has dropped over 8% in the past 24 hours. This downturn comes after the much-awaited launch of ETH ETFs.
The primary reason is the substantial outflow from Grayscale’s Ethereum Trust ETF (ETHE). According to data from SoSo Daily, ETH has seen more than $810 million in net outflows.
This pattern mirrors the behavior observed with Bitcoin ETFs earlier this year. Adding to the downward pressure is the “sell-the-news” scenario.
The initial excitement surrounding the Ethereum ETF launch has dissipated, leading to a sell-off. This phenomenon has been observed during major milestones in December 2017, April 2021, and January 2024.
Unfortunately, the launch of the ETF coincided with the distribution of Bitcoin from Mt. Gox, adding additional selling pressure to an already tense market.
Furthermore, the U.S. tech earnings season kicked off on a sour note, with major sell-offs from giants like Alphabet and Tesla. This has potentially dampened investor sentiment across tech-related assets, including cryptocurrencies.
Analysts are also pointing to Ethereum’s fundamentals as a cause for concern. Key metrics such as new user growth and revenue have shown signs of stagnation, potentially cooling investor enthusiasm.
In fact, 10X Research had flagged Ethereum as overbought before the ETF launch, suggesting it was primed for a potential short-term decline.
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