Ethereum’s price action has taken a quick downturn after reaching a multi-year high of $4,776 and smashing against its “Active Realized Price” level on August 14. The second-largest cryptocurrency has suffered a sell-off in the past six days, with its price falling to as low as $4,074 in the last 24 hours. The decline is occurring alongside institutional investors beginning to pull money from Spot Ethereum ETFs at a record pace, a trend that casts doubt on the sustainability of Ethereum’s price surge above $4,800 and into new all-time highs.
$422.3 Million Pulled In A Single Day
According to data from SosoValue, Tuesday, August 19, was one of the worst days on record for Spot Ethereum ETFs based in the US. Notably, about $422.30 million was withdrawn in a single session, making it the second-largest daily outflow since these funds were created. The only bigger exodus was on August 4, when outflows came to $465 million.
Among the issuers, Grayscale and Fidelity led the exodus with outflows of $122 million and $156.32 million, respectively. BlackRock’s flagship, the iShares Ethereum Trust (ETHA), saw its holdings slip from 3.6 million ETH (around $15.8 billion) to about $14.7 billion on Tuesday.
The timing of this wave of withdrawals in the past 24 hours could not be more damaging, as Ethereum was already sliding from its recent peak. The outflow immediately amplified downward pressure on the market, which caused Ethereum to crash below $4,100.
Tuesday’s outflow numbers were not an isolated incident but the culmination of an outflow trend that has now stretched across three consecutive trading sessions. On Monday, Spot Ethereum ETFs recorded outflows of $196.62 million, which itself was one of the highest single-day exits since launch. This came immediately after Friday’s $59 million outflow, which ended the prior streak of record inflows. In just four days, these withdrawals have drained more than $677 million from Spot Ethereum ETFs.
Record Inflows To Quick Reversal
In the eight trading sessions leading up to last Friday, Spot Ethereum ETFs had attracted an unprecedented $3.7 billion in inflows, with August 11 even surpassing $1 billion in net inflow. That surge in demand was an important factor behind Ethereum’s rally to its $4,776 multi-year high, and this brought along with it predictions that the $4,800 level could soon be breached.
At the time of writing, Ethereum is trading at $4,167, having bounced up at $4,070 and trending a bit upward. In terms of percentage points, the leading cryptocurrency is down by 1.3% in the past 24 hours and 10% in the past seven days. The leading altcoin is now witnessing a domination of sellers, with on-chain data showing that hedge funds have almost doubled their short positions in the past seven days.
The wave of outflows from Spot Ethereum ETFs carries significant implications for Ethereum’s near-term price outlook. If the exodus continues, Ethereum could struggle to maintain its footing above the $4,000 support level and enter into a deeper retracement toward the mid-$3,000 range.
Featured image from Pixabay, chart from Tradingview.com
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