Ethereum slips below $2,300 on August NFP data, ETH ETFs continue to see outflows

• Ethereum falls nearly 5% after August NFP miss.
• Based on the ratio of AUM to market cap, Ethereum ETFs performed more or less in line with Bitcoin ETFs one month after launch.
• ETH needs to bounce around $2,100 to maintain the bull market thesis.

Ethereum (ETH) fell nearly 5% on Friday after the US released its worrying August Nonfarm Payrolls (NFP) data. Meanwhile, JP Morgan analysts published a report stating that ETH ETFs performed closely with Bitcoin ETFs one month after launch.

Daily Market Reasons: Ethereum Falls, JP Morgan Stock Takes ETH ETFs

Ethereum, along with much of the entire crypto market, has posted losses for three consecutive days after another low on Friday. The drop came after the release of August US Non-Farm Payrolls (NFP) data, which revealed an in-line unemployment rate of 4.2% – down from 4.3% in July – and the economy The US added 142,000 jobs.

The US jobs print worried US markets as Wall Street expected at least 160,000 new jobs, and the pattern follows a slowdown in hiring in July. Alongside US stock prices, Ethereum fell after showing signs of recovery during the European trading session.

A similar trend is visible for Ethereum exchange-traded funds (ETFs), which posted negative flows for the third day in a row, according to data from Farside Investors. Products saw net outflows of $0.2 million, the lowest flow since launch.

The poor performance of ETH ETFs is visible when comparing days of inflows versus outflows. In particular, ETH ETFs have seen only nine days of inflows, compared to 23 days of outflows and one day of zero flow since launch. Its cumulative inflows are at net outflows of $0.56 billion.

ETH ETF Streams

While several market participants believe that ETH ETFs have underperformed, JP Morgan analysts said they have performed more or less in line with Bitcoin ETFs. Compared to one-month, post-launch, based on assets under management (AUM) as a percentage of market capitalization, analysts said the two products are nearly on par.

“At the end of August, we estimate that the pool of gross AUM of ETH ETFs (including Grayscale’s ETHE) represented ~2.3% of the global Ethereum market cap,” JP Morgan analysts said. “Compared to the 29th trading day for spot Bitcoin ETFs (February 22, 2024), total BTC ETF AUM (including Grayscale’s GBTC) represented 3.0% of the total Bitcoin market cap at that time weather”, they added.

Meanwhile, asset manager VanEck announced in a press release on Friday that it will close and liquidate its Ethereum Futures ETF (EFUT) after the market closes on September 16. While the company stated several potential reasons for the decision, members of the crypto community noted that it may be because Van Eck has already launched a spot ETH ETF. The company also closed its Bitcoin Futures ETF after the approval of the Bitcoin spot ETF, WuBlockchain noted.

ETH Technical Analysis: Ethereum needs to bounce back to key support to keep the bull market intact

Ethereum is trading around $2,260 on Friday, down 4.7% on the day. Over the past 24 hours, ETH has seen liquidations of $35.08 million, with long and short liquidations accounting for $26.67 million and $8.42 million, respectively.

On the daily chart, ETH has dropped below a descending trendline in a triangle of symmetry suggesting that its price could drop to $2,100 in the coming weeks before staging a rally. ETH saw similar declines from August to November 2022 and from July to October 2023 before staging a rally.

ETH/USDT Daily Chart

If history repeats itself, ETH will bounce back around the $2,100 level before staging a rally to address the $2,817 resistance. If it successfully breaks above this resistance, ETH could strengthen further to approach the yearly high resistance around $4,093.

A daily close of the candlestick below the lower uptrend line of the symmetry triangle could send ETH to support around $1,540.

The Relative Strength Index (RSI) is at 33 and is trending down into oversold territory. The %K and %D lines of the stochastic oscillator show a similar picture, hovering in and around the oversold region.

The Awesome Oscillator has shown consecutive red bars below the zero line, indicating dominant bearish momentum.