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Cryptocurrency News Articles
Ethereum Dominance Tanks to Range Lows as Whales Sell, Demand for ETH ETFs Remains Weak
Oct 10, 2024 at 04:00 am
Ethereum [ETH] has been underperforming against Bitcoin [BTC] over the past year. For instance, Bitcoin has gained more than 120% year-on-year (YoY)
output: A recent analysis by IntoTheBlock has shown that while Bitcoin fiyatı has been on a rising trend this year, several factors have contributed to a decline in its market dominance. One key factor is the rising demand for spot Bitcoin exchange-traded funds (ETFs).
According to data from SoSoValue, these ETFs now hold over $57 billion in BTC, indicating strong institutional interest. This demand has fuelled a positive price performance for Bitcoin.
On the other hand, there has been a weak demand for spot Ethereum ETFs. CryptoQuant data shows that since these ETFs launched in July, they have recorded outflows of $849 million.
The outflows have been largely driven by the Grayscale Ethereum Trust. These ETFs have also seen a lack of new inflows.
According to SoSoValue, the BlackRock spot ETH ETF has recorded zero inflows in the last two days, while the Fidelity Ethereum Fund has not seen any positive flows this month.
This weak demand has not helped drive gains for Ethereum, further contributing to a decline in its market dominance.
Another factor contributing to a decline in Ethereum’s market dominance is the selling activity of large addresses, commonly known as “whales.”
On 8th October, a large address that participated in the 2014 Initial Coin Offering (ICO) to purchase ETH at a lower price point (tenth of an ETH) deposited 5,000 ETH, valued at $12 million, to Kraken. This movement was flagged by eagle-eyed crypto analytic service SpotOnChain.
According to the blockchain analytics platform, the whale has moved around 50,000 ETH (>$125 million) to exchanges in the last two weeks.
The large crypto exchange deposits usually indicate an intent to sell holdings or to move funds for other purposes. While the realized loss from such a sale would be substantial, it could put further sell-side pressure on Ethereum if fresh buying demand fails to absorb the selling pressure.
The Ethereum Foundation, which has also been on a selling spree, has contributed to ETH’s underperformance. Since the beginning of the year, this institution has sold more than $10 million worth of ETH.
An uptick in whale selling activity without a rise in demand could see ETH continue trading range-bound if new buyers fail to enter the market.
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