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Inflows into spot Ethereum ETFs have surged once again, netting more than $447 million on September 5. BlackRock’s iShares Ethereum Trust (ETHA) led the most outflows at $309 million. Amid these outflows, ETH price has also seen a pullback and is currently trading under $4,300. Similarly, Bitcoin funds have also recorded net outflows this week, but at a lesser magnitude.
Ethereum ETFs Start September on A Negative Note
US spot Ether exchange-traded funds (ETFs) recorded four straight days of net outflows during the shortened U.S. Labor Day trading week.
On Friday alone, Ethereum ETFs saw $446.8 million in withdrawals. This pushed the total outflows for the week to $787.6 million. In contrast, Bitcoin ETFs attracted $250.3 million in net inflows over the same period.
The shift follows a strong August performance for Ether ETFs, which brought in $3.87 billion in net inflows. On the other hand, Bitcoin ETFs registered $751 million in outflows last month, according to Farside data. As a result, the net inflows since inception have once again dropped under $13 billion.
Bitcoin ETFs Continue to Bleed Along With Ethereum ETFs
Along with spot Ethereum ETFs, Bitcoin ETFs have also seen outflows in the last two trading sessions. On Friday, September 5, the net outflows stood at $160 million, with BlackRock’s IBIT seeing $63.2 million in outflows, Fidelity’s FBTC seeing $49.6 million in outflows, and Grayscale’s GBTC seeing $47.3 million in net outflows.
Since July, the Bitcoin ETFs have seen subdued activity in terms of flows. This is because institutional investors are waiting on the sidelines amid uncertain macro conditions. Bitcoin price is consolidating around $110,000 as investors await clear signals on Fed rate cuts ahead.
Capital Rotation from ETH to BTC
Throughout July and till mid-August, Ethereum price dominated the broader crypto market rally by a wide margin. On the other hand, the Bitcoin price made a steady move to its all-time high at $124,000.
However, after ETH touched an all-time high at $4,884, it has faced strong selling pressure. Since then, the Ethereum price has been moving sideways and has corrected more tha 15% from the peak. On the other hand, Bitcoin has been showing relatively greater strength. Market analysts believe that a strong capital rotation from ETH to BTC is underway.
Crypto trader Daan Crypto Trades noted that ETH has remained weak against BTC, gradually trending lower over the past several weeks. He pointed out that most of ETH’s larger upward moves during this period were driven by a single entity swapping billions of dollars’ worth of BTC into ETH.
Looking ahead, the analyst expects Bitcoin to outperform in the near term. As the ETH/BTC ratio cools off, he also expects the Bitcoin dominance to bounce back once again.
Furthermore, the crypto analyst observed that Ethereum (ETH) volatility has steadily declined, with price action becoming increasingly compressed. The analyst noted that the $4,200–$4,300 range has been holding as support for the past two weeks. However, the analyst believes that with weaker bounces on each test, the level may eventually give way.
Daan Crypto Trade added that a reset could provide healthier market conditions heading into year-end. He also highlighted the $3,900 zone as an area of interest for a potential swing long position.
