Ethereum price was in a significant downtrend despite the historic launch of the first Ethereum-based exchange-traded funds (ETFs) in the US. According to Tradingview data, Ethereum price fell over 24% in the past month, trading at $2,572 as of August 19. The long-awaited launch of the first Ethereum ETF funds did not support Ethereum’s price despite the historic launch.
Why is Ethereum Price Dropping?
During this period, according to Farside Investors data, US Ethereum ETF funds recorded a total net outflow of $420.5 million since the launch, creating significant additional selling pressure, which could be a major reason behind Ethereum’s price drop. Access COINTURK FINANCE to get the latest financial and business news.
Investors expected a significant price increase from the launch of Ethereum ETF funds. Since Bitcoin surpassed the $50,000 mark on February 15, approximately 75% of new investments in the cryptocurrency were covered by ETF funds.
Details on the Matter
The increasing supply of Ethereum could also have contributed to the price drop. According to Ultrasound.money data, since the launch of spot Ethereum ETF funds in the US on July 23, the Ethereum supply, valued at over $155 million at the time of writing, increased by 60,555 Ethereum.
This brings Ethereum’s supply growth rate to an annual 0.61% over the past 30 days, with an annual issuance rate of 940,000 Ethereum and a burn rate of 203,000. Ethereum’s largest upgrade since the Merge update, the Dencun upgrade, went live on the mainnet on March 13, promising to significantly reduce transaction fees for Layer-2 networks and improve Ethereum’s overall scalability. However, according to a CryptoQuant X post dated August 19, Ethereum price has struggled since the Dencun upgrade:
“Despite the approval of Ethereum ETF funds, Ethereum price has struggled since the Dencun upgrade. Ethereum supply increased by more than 197,000 Ethereum and the price dropped by 35%.”
However, according to popular crypto investor Ted, based on historical chart patterns, Ethereum price could be poised for a breakout in the first quarter of 2025. Ted wrote in an X post dated August 11:
“The consolidation breakout will occur in November/December 2024, with the parabolic run starting in Q1 2025.”
