Ethereum and the broader cryptocurrency market experienced a downturn on Wednesday following Iran's missile strikes on Israel the previous day, which escalated tensions in the ongoing conflict with Hezbollah in Lebanon.
In light of Israeli officials' announcements regarding their response, investor sentiment has shifted, leading to a quick retreat from the risk-on approach that characterized the previous two weeks.
This change is reflected in the Ethereum ETFs, which saw a stark contrast in inflows from the previous week to significant outflows on Tuesday. The total outflows reached $48.6 million, with Grayscale's ETHE losing $26.6 million and Fidelity's FETH experiencing $25 million in outflows — marking their largest exit since inception.
Despite this, spot traders appear to be less pessimistic. Data from CryptoQuant indicates that while ETF investors reacted negatively, those following ETH's exchange flows in the last 24 hours may be capitalizing on the dip, as nearly 40,000 ETH were withdrawn from exchanges during that timeframe.
