Ethereum News Today: Why ETF Inflows Fail to Lift Ethereum Amid Fed Uncertainty

Ethereum spot ETFs ended an eight-day outflow streak on Nov. 21, recording $55.71 million in net inflows as Fidelity's FETH led the recovery with $95.40 million in redemptions, according to SoSoValue data. The inflows partially offset earlier outflows, including BlackRock's ETHA, which posted $53.68 million in redemptions on the same day. Despite the positive flows, Ethereum's price remained below $2,800, down 12.9% weekly and 28.9% over the past month. The ETF rebound followed a period of intense selling pressure, with Ethereum funds hemorrhaging $1.3 billion between Nov. 11 and Nov. 20.

The broader cryptocurrency market has been under pressure amid uncertainty over Federal Reserve rate cuts and reduced institutional demand. Bitcoin ETFs, including BlackRock's IBIT, saw record outflows of $523 million on Nov. 19 - the largest single-day redemption since the fund's January 2024 debut. Cumulative outflows for Bitcoin ETFs reached $372.7 million on Tuesday, driven by declining investor confidence as the CME Group's FedWatch tool priced in a 48.9% chance of a 25-basis-point rate cut in December. Analysts attribute the outflows to a "risk-off" environment triggered by the Fed's October comments suggesting a December rate cut was not guaranteed.

Ethereum's price struggles highlight the disconnect between ETF flows and on-chain activity. While ETF inflows briefly pushed ETH above $3,100 in late November, the token has since retreated to sub-$2,800 levels. Chainalysis data shows over $2 billion in losses from cross-chain bridge hacks in 2022, underscoring lingering risks in the Ethereum ecosystem. However, the Ethereum Foundation's Account Abstraction team is advancing a plan to unify Layer 2 networks via the Ethereum Improvement Layer (EIL), aiming to simplify cross-chain transactions and reduce reliance on centralized infrastructure. The initiative, likened to HTTP's role in the internet's early development, could enhance user experience and attract new capital to the network.

Market participants remain cautious. Smart money traders on Hyperliquid added $5.7 million in short positions over 24 hours, signaling bearish expectations. Meanwhile, Grayscale's ETH mini trust and Bitwise's ETHW attracted $7.73 million and $6.26 million in inflows, respectively. The Ethereum ETF landscape is also testing new waters, with Fidelity's FSOL and Canary Capital's SOLC launching alongside BlackRock's ETHA. These moves reflect a broader trend of institutional players experimenting with altcoin exposure, even as Bitcoin dominates headlines.

Technical indicators suggest Ethereum faces an uphill battle. The RSI remains below neutral levels, and the Stochastic Oscillator has just exited the oversold region, indicating weak bullish momentum. A failure to defend $3,100 could push ETH toward $2,850, with further support at $2,380. For now, the market's focus remains on macroeconomic signals, with liquidity stabilization and Fed policy decisions poised to drive the next major price action.