Ethereum Price Movement: Understanding the Impact of ETF Outflows and Staking Yield

Ethereum’s price has been experiencing volatility, with its exchange-traded funds (ETFs) witnessing large outflows and staking yield falling. The cryptocurrency was trading at $3,268, down from its last month’s high of $4,104. This price action mirrors that of Bitcoin, which has retreated from an all-time high of $108,000 to below $95,000.

Declining Demand for Ethereum ETFs

Data shows that demand for Ethereum ETFs on Wall Street has fallen in the past few days. All Ethereum funds lost $68 million in assets on Friday, following a loss of $159.3 million on Thursday and $86 million on Wednesday. These funds now have over $11.61 billion in assets, representing 2.96% of Ethereum’s market cap. In contrast, Bitcoin ETFs have $107 billion in assets, or 5.2% of its market cap.

Rising Exchange Balances and Falling Futures Open Interest

According to recent data, Ethereum balances on centralized exchanges have risen this year. There are now 15.8 million ETH coins on exchanges, up from 15.30 million on December 30. Higher exchange balances often indicate that investors are moving their tokens from their wallets to centralized exchange (CEX) platforms, usually a precursor to selling. Additionally, Ethereum’s futures open interest has dropped from its December high of $31.1 billion, a sign of falling demand.

Staking Yield and Its Impact on Ethereum Price

Ethereum stakers are currently generating a smaller yield. The cryptocurrency has a staking reward rate of 3.10%, lower than some of its competitors. Ethereum’s staking rewards often drop when more tokens are delegated to staking pools and when fees fall. As a result, Ethereum’s fees have been on a downward trajectory in the last few weeks.

Ethereum Price Chart Analysis

The daily chart shows that the ETH price peaked at $4,104 in December, forming a double-top pattern with a neckline at $3,520. It has dropped below the 50-day moving average at $3,415 and found substantial support at the 100-day moving average. Ethereum also found support at the ascending trendline that connects the lowest levels since November 15.

There are signs that the coin has formed a head-and-shoulders pattern, a popular bearish sign. A drop below the 100-day moving average and the ascending trendline could point to a bearish breakdown, potentially to $2,820, the highest level since August last year.

Tips for investors:

  • Monitor Ethereum’s ETF outflows and staking yield for potential price movements.
  • Keep an eye on exchange balances and futures open interest for signs of falling demand.
  • Consider the impact of staking rewards on Ethereum’s price.

Stay up-to-date with the latest news and trends in the cryptocurrency market by following Global Crypto News.

Post Views: 0