Ethereum’s native token, Ether (ETH), has seen a sharp decline of approximately 8.75% in the past 24 hours, reaching around $3,170 on July 25. This downturn comes a day after the launch of eight spot Ethereum exchange-traded funds (ETFs) on the New York Stock Exchange, highlighting a classic “sell-the-news” phenomenon in the crypto markets.
Sell-the-News Reaction
The “sell-the-news” strategy typically involves investors offloading assets immediately after a highly anticipated event, often despite positive developments. This reaction suggests that the positive sentiment surrounding the ETF launch had already been priced in leading up to the event. A similar pattern was observed in January when Bitcoin (BTC) faced a similar decline following the introduction of its spot ETFs.
![ETH/USD four-hour price chart. Source: TradingView](https://i0.wp.com/coinbrit.news/wp-content/uploads/2024/07/b582734f-2cb7-468a-93e2-fc58e20c31a4.png?resize=947%2C502&ssl=1)
ETH/USD four-hour price chart. Source: TradingView
ETF Outflows and Market Pressure
Compounding Ether’s decline were significant outflows from spot ETFs, amounting to $113.3 million on their second trading day, primarily driven by withdrawals from Grayscale’s Ethereum Trust, which experienced a staggering $326.9 million in outflows. Despite this, other ETFs, such as the Fidelity Ethereum Fund and the Bitwise Ethereum ETF, reported net inflows, indicating a shift in investor strategy towards lower-fee alternatives.
![Ethereum ETF net flows daily. Source: Farside Investors](https://i0.wp.com/coinbrit.news/wp-content/uploads/2024/07/0745a267-e79b-47ee-9745-aec1257d4cf0.webp?resize=1023%2C829&ssl=1)
Ethereum ETF net flows daily. Source: Farside Investors
Broader Market Influence
Ether’s price drop is also influenced by external market factors. The ongoing reimbursement process for approximately 127,000 creditors of the defunct Mt. Gox, combined with a significant sell-off in megacap technology shares, has heightened risk aversion among investors. The US stock market experienced its worst day since 2022, dragging down sentiment across asset classes, including cryptocurrencies.
![Ethereum ETFs fee comparison. Source: Issuer Filings](https://i0.wp.com/coinbrit.news/wp-content/uploads/2024/07/42ea3569-32c1-43bd-8ecc-ec92e7a96c7e-300x229.webp?resize=840%2C640&ssl=1)
Ethereum ETFs fee comparison. Source: Issuer Filings
Technical Outlook
From a technical perspective, Ether’s recent losses align with a correction within its prevailing descending channel pattern. If this trend continues, ETH could potentially decline toward a support level of around $2,850, a target that has historically provided strong long-term support.