Creating optimism in the market, the long-awaited launch of spot Ether exchange-traded funds (ETFs) quickly led to a sell-off and subsequent decline in Ether price.

According to the latest report from 10x Research, this selloff closely follows a familiar pattern seen in previous crypto ETF launches, particularly spot Bitcoin ETFs.

Markus Thielen, founder of 10x Research, explained that many traders predict that “Ethereum ETFs will capture 20% of Bitcoin ETF inflows.”

“However, they ignored the potential billion-dollar exits from Grayscale and the tendency of exchange listings to trigger ‘sell the news’ reactions. Additionally, the crypto market is entering a seasonally weak period.”

Approval and launch of Spot Ether ETFs, Mt. This coincided with the first BTC distributions from Gox, causing selling pressure to increase in the market.

According to the 10x report, Grayscale’s $9 billion Ethereum Trust experienced significant outflows — losing $481 million on the first day and $326 million on the second day. In comparison, other ETF issuers like Bitwise recorded inflows of $204 million, largely from venture capital firm Pantera Capital.

While this indicates mixed sentiment in the market, Pantera’s rapid sale of its “seed investment” demonstrates a lack of confidence in sustainable growth. The report is bearish on Ether, stating that Ether is overbought ahead of the much-anticipated ETF launch.

“Ethereum may be the weakest link where fundamentals (new users, revenues, etc.) are stagnant or low.”

ETH’s price has stabilized around $3,181, falling almost 8% in the last 24 hours following market uncertainty.

The 10x report explains that while BTC enjoys “digital gold” status, Wall Street traders are struggling to define ETH’s unique value proposition.

“While technology investments are often risky, Wall Street people generally don’t bet on things they don’t understand.”

According to a report dated July 23, 10x Research unveiled a stochastic indicator showing ETH at the top of its range, indicating a possible market top.

“A reading above 90% is generally associated with a correction, while a level below 15% has signaled bottoms to buy. Ethereum appears to be heading lower as the current reading has dropped from 92% to 87%.”

The report also highlights the shift from ETH to Solana, with memecoin issuance heading towards the Solana blockchain instead of ETH.

Report, Mt. Gox is warning investors that further declines could come with the upcoming United States earnings season and “weak seasonality for August and September.”