Ethereum Faces Mixed Signals Amid ETF Challenges and Upcoming Network Upgrades

• Despite the approval of nine spot Ethereum ETFs in the U.S., these products have seen disappointing demand, with negative daily flows recorded 61% of the time since their launch.
• Despite these challenges, Ethereum’s price has shown resilience, recently surpassing a key resistance level of $2,500 and trading above $2,550.

Ethereum, the largest altcoin, is facing mixed market signals with various factors influencing its price and adoption. Among these factors are developments in ETFs, network upgrades, and technical indicators. All of these factors are contributing to a complex scenario for ETH price and the network overall.

Ethereum ETF Shows Major Underperformance

The introduction of Ethereum spot ETFs in the U.S., initially seen as a significant achievement, has not met expectations. Despite the approval of nine U.S. Ethereum ETFs in July, these financial products have experienced low demand. James Seyffart, an analyst at Bloomberg Intelligence, acknowledged his overly optimistic outlook.

In a panel at the Permissionless Crypto conference, Seyffart declared, “I was way too bullish.” According to Glassnode data, Ether ETFs have recorded negative daily flows 61% of the time since their inception. Furthermore, the total outflows, as reported by Farside Investors, have reached $546 million. World’s largest asset manager BlackRock also admitted the challenges faced by Ethereum, per the CNF report. 

This disappointing performance contrasts sharply with spot Bitcoin ETFs, which generated $12 billion in inflows within their first quarter. The lackluster reception of these ETFs has led some to question whether the SEC’s approval of ETH ETFs was premature.

Thus, the regulatory body has postponed its decision on Cboe’s proposal to list options on Ethereum ETFs. Now, they have extended the review deadline from October 19 to December 3.

Meanwhile, outside the U.S., Australia recently launched its first ETF holding Ether directly, reported CNF. The Monochrome Ethereum ETF (IETH) started trading on Cboe Australia on October 15, attracting $176,600 in assets under management. This launch follows the success of Monochrome’s Bitcoin ETF, which has accumulated nearly $10.7 million since its debut in June.

Jeff Yew, CEO of Monochrome, has expressed optimism about the Australian ETH ETF market. He suggested that it may take a “different trajectory” from other regions like the U.S. in terms of crypto ETF adoption.

ETH Price Technicals Stay Strong

Amid the challenges surrounding ETFs, Ethereum price has remained resilient. It recently even climbed past a key resistance level of $2,500. The price surged over 5%, with ETH trading above $2,550 and surpassing the 100-hourly Simple Moving Average.

On the technical side, a bullish trend line has formed with support at around $2,520 on the hourly chart. If the ETH price can break through the $2,620 and $2,650 resistance levels, it could sustain its upward momentum. Whilst, the next major resistance at $2,720. If Ether bulls could sustain the rally, potential targets include $2,800 and $2,880.

However, failure to clear the $2,650 resistance could lead to a pullback with support levels at $2,600 and $2,520. A decline below these support levels might drive Ethereum’s price toward $2,450 or $2,400 in the short term.

In terms of network updates, Ethereum co-founder Vitalik Buterin has proposed lowering the validator threshold from 32 ETH to 1 ETH, reported CNF. This move will increase participation in staking and enhancing decentralization. Another proposal introduces a “single-slot finality” feature, which could reduce block finalization times from 15 minutes to about 12 seconds.