Ethereum has gained 0.5% over the past day, even as exchange-traded funds (ETFs) tracking ETH continued to shed assets amid investor nervousness over inflation and other macroeconomic uncertainties.
The second-largest cryptocurrency by market value recently changed hands at $3,973. According to crypto market aggregator CoinGecko, ETH is currently up 2.3% since this time last week, but is trading 9.5% below its price a month ago.
The Ethereum ETF lost $145 million on Monday after losing $311 million last week. However, Bitcoin funds have recovered more quickly than last week, when total outflows were $1.2 billion, according to British investment firm Farside Investors. Yesterday, the BTC fund lost $40.4 million.
“Continued redemptions in recent sessions indicate that passive institutional selling remains active while deleveraging and forced liquidations increase near-term vulnerabilities,” Bitunix analyst Dean Chen said. decryption. “The delay in the US CPI release scheduled for October 24th due to the government shutdown triggered a major systemic risk this week.”
Users of Prediction Markets Owned by Myriad decryption Parent company Dastan accurately predicted that the U.S. government shutdown would extend beyond mid-October. There was initial suspicion among users that the current closure period, which has now been extended to 20 days, could be the longest in history. For that to happen, it would have to last 35 days, overcoming the 2018-2019 shutdown during President Donald Trump's first term.
But on Monday, the odds reversed, with 60% of Myriad users now believing the government shutdown will last long enough to be the longest on record.
Meanwhile, crypto analyst and Coin Bureau co-founder Nick Pucklin said financial institutions are more comfortable with BTC than ETH. decryption.
“ETF trends suggest that Bitcoin remains the most trusted crypto asset for institutional investors, with its dominance still near 60%,” he said. “Therefore, it is no wonder that Ethereum ETFs are in even more trouble.”
He added that while there are signs of fatigue among crypto investors, “any positive news could quickly reverse the situation.”
Investors are now anxiously watching the Bureau of Labor Statistics' September Consumer Price Index report, due out on Friday. The BLS said it would have been released last week had it not been for the shutdown.
“From a macro perspective, a better-than-expected CPI could push the USD and real yields higher, putting new pressure on risk assets and pushing ETH toward the $3,700 area,” Chen said. “Conversely, a softening outlook for inflation could trigger short covering and risk onflows, facilitating a normalization and rapid rebound in the futures basis.”
This sentiment is also reflected in Ethereum’s derivatives data, said Jean-David Pequinho, chief commercial officer of Deribit at Coinbase. decryption.
“Overall, ETH options are showing increased volatility expectations around CPI, with a defensive but more optimistic undertone in the short term,” he said. “Weakness in CPI could cool yields and the dollar, triggering a bullish reaction by retesting ETH resistance. Strong inflation stats could extend the consolidation or trigger a downside.”
