BlackRock and Fidelity Cut ETH ETF Holdings Amid Continued Downturn

Ethereum ETFs faced significant losses due to decreased demand, prompting leading financial institutions to reduce their holdings. This article examines the recent outflows, market trends, and potential implications for Ethereum's price and ETF issuers.

Key Takeaways

Major issuers of Ethereum ETFs, including BlackRock and Fidelity, have reported significant outflows.
As of August 19, Ethereum ETFs experienced $422 million in net outflows, marking the third consecutive decline.
BlackRock, Fidelity, and Grayscale collectively sold ETH valued up to $160 million during this period.
ETH is currently trading around $4,180, experiencing a drop of approximately 1.5% in the last 24 hours.
Despite the outflows, Ethereum ETF issuers still hold over 6.3 million ETH, representing about 5% of the total ETH supply.

BlackRock and Fidelity Cut ETH ETF Holdings Amid Continued Downturn

Recent Developments in Ethereum ETFs

Ethereum ETFs have seen a challenging phase as cooling demand leads to increased outflows from these investment vehicles. As per the latest data from SoSoValue, Ethereum ETFs recorded $422 million in net outflows on August 19, marking the third day in a row that they closed negatively. This figure signifies the second-largest single-day withdrawal since their inception.

Fidelity drove the outflows with $156 million, followed by Grayscale with $122 million and another $89 million across their two offerings. Bitwise experienced $40 million in withdrawals, while other entities like BlackRock, Franklin Templeton, and Invesco saw smaller outflows ranging from $3 million to $6 million.

Over the three-day period, these funds lost approximately $678 million, leading to a sell-off among major institutional players. On-chain analytics from Arkham Intelligence indicate that BlackRock, Fidelity, and Grayscale have recently liquidated substantial portions of their Ethereum holdings, amounting to around $160 million.

Ethereum

This significant pullback in outflows represents a reversal from a month-long trend of accumulating positions among these firms and aligns with a broader decline in Ethereum's performance.

Market Trends for Ethereum

Since failing to hold onto the gains from its recent rally, Ethereum has been on a downward trajectory. As of now, the asset is trading around $4,180, having fallen approximately 1.5% in the last 24 hours and extending its weekly losses to over 10%.

The ongoing decline places ETH in a critical testing zone, with new on-chain signals indicating a cautious market environment. The daily chart reveals that the price is consolidating just above the 20-day Exponential Moving Average (EMA), around the $4,135 level, which is currently acting as immediate support following a peak near $4,750 earlier this month.

While the general trend remains favorable, as indicated by the upward sloping 50, 100, and 200-day EMAs, short-term momentum for ETH has decelerated. The Relative Strength Index (RSI) has dropped to 54, retreating from overbought conditions earlier this month, signaling a decrease in buying pressure.

This adjustment places ETH in a neutral position, suggesting the market is neither excessively high nor excessively low. If ETH can maintain its position above the $4,135 support level, it may stabilize and prepare for another effort to reach the $4,500–$4,700 range. However, a drop below this support could shift focus to the 50-day EMA near $3,690, potentially leading to a more significant correction phase.

Current Position of Ethereum ETF Issuers

Despite the recent sales, Ethereum ETF issuers still maintain substantial holdings, with more than 6.3 million ETH under management. This amounts to about 5% of the total Ethereum supply, valued at nearly $26 billion at current market rates.

However, if ETH does not regain upward momentum, continued outflows could exacerbate selling pressure, adding to the existing bearish trend.