Grayscale's Ethereum ETF has experienced massive outflows since its launch.
Analysts predict these outflows will slow or reverse soon, likely this week.
A reversal of outflows could lead to a bullish reversal for Ethereum's price if history is any indication.
Over the last two weeks, the ETF market has been the subject of relentless speculation, especially concerning the launch of the spot Ether ETPs on 23 July.
The Ethereum ETF performance
The outflows from Grayscale's ETHE continue to baffle investors and analysts with four days of straight reds between 24 and 29 July, as the price of $ETH continues to struggle.
However, analysts are becoming optimistic that this trend might reverse soon, and the price of Ethereum might see a bullish reversal.
As of 29 July, according to data from Soso Value and Farside, the Ethereum ETFs have seen outflows totalling $98 million on the fourth consecutive day of losses.
This trend, while concerning to investors, is showing signs of letting up as of writing, according to a few industry experts.
One of these experts is Michael van de Poppe, who stated in a recent post around the time of the ETF approvals that once the outflows from Grayscale stagnate or go below the $100 million mark, the entire market will be set to reverse to the upside.
As of Monday this week, Grayscale’s outflows sat at around $210 million, which is miles above the $100 million mark.
On the other hand, another senior analyst, Mads Eberhardt, from Steno Research, weighed in on the situation in a tweet, stating that he believes the outflows from Grayscale's ETF are likely to end this week.
“The Ethereum ETF net outflow is yet to subside,” the analyst says “but it is likely that it will happen this week. When it does, it's up only from there.”
For the last four days of trading, the entire market has been in a state of outflows.
Most of the ETFs have remained green or neutral so far when it comes to netflows.
However, Grayscale's consistent outflows have continually tipped the scales, leaving the entire market with a cumulative outflow rate of -$440 million.
Notably, BlackRock's iShares Ethereum Trust (ETHA) has seen the largest cumulative inflows at $500 million, followed by the Bitwise Ethereum ETF (ETHW) with $276 million and the Fidelity Ethereum Fund (FETH) with $244 million.
However, according to Eberhardt, considering how Grayscale's Bitcoin ETF saw a dip in outflows after the eleventh day, we might be seeing the same thing happen with the asset manager’s Ethereum ETF.
Grayscale Ethereum ETF has seen a much higher outflow relative to its AUM, and because of this, Eberhardt is optimistic that these outflows will recede, with a positive shift in Ethereum’s price in tow.
Another analyst, Evanss6, said something similar about the relationship between the Bitcoin ETFs and Ether ETFs.
The analyst, In another tweet, stated that since the outflows from Bitcoin ETFs bottomed on the seventh trading day, with Grayscale's GBTC hitting 13.2% of the original fund;
Compared to how the Grayscale Ethereum ETF was dumped even faster than the Bitcoin ETF, a reversal might soon come in.
It should also be noted that when the Bitcoin ETF market recovered, Bitcoin's price surged approximately 92% in 50 days.
It follows that if we see something similar happen with Ethereum, we can expect a serious price explosion on ETH (and the rest of the altcoin market).
Ethereum’s price action
At the time of writing, Ethereum trades at around $3,340 and is aiming to break above the $3,542 and $3,709 resistance blocks.
A bullish continuation from the ETF market should be able to set Ethereum back on track towards the $4,000 zone or even higher soon.
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