The price of Ethereum (ETH) has witnessed a substantial downturn following the introduction of the Spot Ethereum ETFs, suggesting that the debut was a “sell the news” occurrence.
According to an analysis, Ethereum has experienced a 10% decrease in value since trading commenced on July 23. Further losses may occur. Markus Thielen, the Head of Research at Matrixport, provided a comprehensive explanation for the decrease in the price of ETH.
This includes the significant amount of money withdrawn from the Grayscale Ethereum fund, which currently owns over $9 billion worth of ETH. Additionally, the release of funds from Mt. Gox, which coincided with the introduction of the Spot Ethereum ETFs, also contributed to the reduction.
The outflows from the Grayscale ETH fund have primarily caused a decrease in the ETH price. Thielen also highlights that the ETH price may have peaked based on the daily stochastics indicator.
This indicator suggests that a low value often indicates a buying opportunity and a price decline, while a high value suggests that the price may have reached its highest point.
Prior to the debut of Spot Ethereum ETFs, the ETH price reached a level of 92%, indicating that the cryptocurrency is currently in an overbought state. If investors sell their assets, the value of the stochastic indicator is anticipated to decrease if investors persist in selling their assets.
Grayscale’s Ethereum ETF (ETHE) has lost over $1 billion in three trading days after its conversion, lowering assets under management from $9 billion to $7.4 billion despite the recent hype about ETH ETFs.
