Ethereum market dominance shrinks amid BlackRock’s ETHA stage

• Ethereum market dominance is down 1.5% since the November 2022 FTX implosion.
• BlackRock iShares Ethereum Trust surpasses $1 billion in cumulative net inflows despite ETH ETF outflows.
• Ethereum continues to consolidate as it fails to break above a key trend line.

Ethereum (ETH) rose more than 1% on Wednesday after a Glassnode report showing the dominant loss of market capitalization compared to Bitcoin. Meanwhile, despite negative flows in the broader ETH ETF category, BlackRock’s iShares Ethereum Trust ( ETHA ) crossed the $1 billion net inflow threshold.

Daily Market Reasons: Ethereum Dominance, BlackRock’s ETHA Milestone

Ethereum’s dominance has fallen from 16.8% to 15.2% since the FTX exchange implosion in November 2022, Glassnode noted in a recent report. Dominance is the ratio of an asset’s market capitalization to the cumulative market capitalization of all other cryptocurrencies.

“As the second largest asset in the ecosystem, Ethereum has seen its dominance decline by 1.5%, remaining relatively flat over the past two years,” Glassnode analysts wrote.

In comparison, Bitcoin’s market dominance has grown from 38.7% to over 56% over the same time. The increase also comes at the expense of stablecoin and altcoin dominance, which fell 9.9% and 5.9%, respectively.

Major asset dominance

Despite the shrinking market cap, capital has continued to flow into Ethereum since the end of October 2023.

In addition, Ethereum sell-side versus buy-side (USD) flow has steadily decreased since March and has now turned positive for the first time since June 2023, according to Glassnode data. A potential reason for the positive data could be strong buying pressure from investors after prices fell on August 5 to lows last seen in January.

Meanwhile, BlackRock’s iShares Ethereum Trust ( ETHA ) crossed the $1 billion mark on Tuesday after posting a net inflow of $26.8 million, according to data from Farside Investors. The milestone places ETHA among the top seven ETF launches, noted Nate Geraci, president of the ETF Store.

Despite ETHA’s positive move, combined net inflows for Ethereum ETFs were negative, posting net outflows of $6.5 million. ETH ETFs have now extended their outflow streak to four consecutive trading days of negative flows. This is in contrast to Bitcoin ETFs, which have seen four consecutive days of net inflows.

Ethereum ETF Flow

ETH Technical Analysis: Ethereum Continues Failed Attempts to Break Above Key Trendline

Ethereum is trading around $2,600 on Wednesday, up 1% on the day. Over the past 24 hours, Ethereum traders have sustained over $40 million in liquidations, with long and short liquidations accounting for $35.36 million and $4.66 million, respectively.

The price of Ethereum has strengthened over the past week, indicating indecision among traders. While buyers tried to stage a rally, resistance around $2,783 and a downtrend line extending from May 27 to September 27 kept ETH around the $2,500 to $2,700 range.

ETH/USDT Daily Chart

The trendline suggests that ETH could drop to the $2,000-$2,200 range in the coming weeks before staging a rally. ETH saw similar declines from August 2022 to November 2022 and from July 2023 to October 2023, before eventually participating in a three-month rally on both occasions.

The Relative Strength Index (RSI) is below its median line at 40, indicating neutrality. However, the Awesome Oscillator showing consecutive shorter green bars below the zero line suggests that there could be a bullish reversal despite the prevailing bearish trend.

A daily close of the candlestick above the $2,783 resistance will invalidate the short-term bearish thesis.