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Head of Research at CoinShares, James Butterfill, revealed some concerning news in the latest European digital asset manager report. With a $59 million outflow in the past week, tensions are high in the crypto market. While Bitcoin was the asset that had the greatest losses, it seems Ethereum is headed for more pain, while overall trading volumes dropped by 73% from the previous week.
Institutional Outflows Remain High
While XRP saw inflows of $0.7 million, ETH outflows totalled $4.8 million, bringing the year’s total to $108 million. Butterfill said the lacklustre performance made ETH “the least loved digital asset amongst ETP investors this year.”
ETP, which stands for ‘Exchange-Traded Product’, includes a wide range of investment products designed to expose investors to various assets, such as ETFs, exchange-traded notes (ETN), and exchange-traded mutual funds (ETFM).
The recent FTX scare about a massive sell-off of tokens, which could potentially trigger larger price drops, further causes concerns. FTX lawyers asked the court to allow the liquidation of $3.4 billion in crypto assets. The Delaware Bankruptcy Court approved on September 13, but the proposal would only allow for an initial release of $100 million in funds per week. This would not likely trigger massive price movements as some initially feared.
Could ETH Slide Below the Crucial $1,000 Mark?
In a report named ‘The Altcoin Crash is Coming’, research platform Matrixport suggests a grim outlook for Ethereum. It said: “A decline below $1,500 could bring back the idea that Ether could decline to $1,000 — a level that would appear justified based on the revenue projection from the Ethereum ecosystem.”
On the upside, Cathie Wood’s Ark Invest recently applied for Spot Ethereum ETF. While it remains to be seen if this gets approval, given the many Spot Bitcoin ETFs currently in limbo, it sends an overall bullish signal that the second-largest cryptocurrency is still popular. As per CoinMarketCap, Ethereum is currently trading at $1619, down about 13.85% month-on-month.
The report by Matrixport also highlights that the current ETH price is below the 50-day moving average, which is considered a bearish signal. Of course, ETH is not the only cryptocurrency experiencing losses; the overall market is trending downward with few exceptions. This makes ETH losses less about Ethereum’s fundamentals and more about overall market sentiment.