Ethereum price has dropped for two consecutive days, erasing most gains in the last three weeks. The price of Ethereum retreated to $3,145 on Thursday, its lowest level since July 13 and 11% below its highest point this week.

Why Ethereum Price is Falling

This pullback happened despite the Securities and Exchange Commission’s recent approval of spot Ethereum ETFs and their strong performance. On Wednesday, these ETFs traded about $852 million compared to Bitcoin’s $1.1 billion, indicating strong demand among investors. Data shows that ETHA has over $269 million in assets, while the Bitwise Ethereum ETF (ETHW) has $230 million in assets.

Ethereum has dropped for three main reasons. According to Michael van de Poppe, a popular crypto analyst, the ongoing liquidations from the Grayscale Ethereum Trust (ETHE) are a significant factor. The fund has an expense ratio of 2.50%, which has led many investors to sell their holdings and move to cheaper funds. For example, an ETHE investor with $100,000 in assets will pay a fee of $2,500, while one in Grayscale’s Mini Ethereum ETF (ETH) will pay just $150.

Michael suggests that Ethereum price could retreat further before bouncing back when outflows from ETHE ease. He expects that the coin could reach a new high when these outflows end.

“One to two weeks for downward momentum, before the real surge of Ethereum towards a new all-time high.”

Second, Ethereum price is falling as investors sell the news since the token rallied ahead of the approval. In most cases, assets rise ahead of a major event and then retreat when it happens. This pattern was observed after the recent Bitcoin halving and the approval of Bitcoin ETFs in January.

Finally, the decline aligns with the ongoing Bitcoin price action. BTC, the biggest crypto in the industry, has dropped for four straight days, triggering a sell-off among other altcoins like Avalanche and Jasmy.

Despite the ongoing decline, a bullish case can be made for Ethereum. It is the second-biggest cryptocurrency in the world, has a history of outperforming Bitcoin, and offers strong utility. According to Jay Jacobs of BlackRock, “While many see Bitcoin’s key appeal in its scarcity, many find Ethereum’s appeal in its utility.”

Ethereum remains the most active blockchain network. It handles the most stablecoin transactions, has the most assets in the decentralized finance industry, and generates the most revenue. Data shows that it has made over $1.7 billion in fees this year, double what Tron and Bitcoin have made combined.

For more updates and detailed analyses on the cryptocurrency market, continue exploring Global Crypto News.

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