Is Ethereum Poised for a New High Following ETF Inflows?

The fourth week of July brought drama and chaos in the ecosystem after the Ethereum ETFs made a dramatic entrance on July 22, generating over $4 billion in trading volume within their first week. This robust start has raised expectations for a potential price boost in Ethereum. While the price of ETH initially declined, recent developments have shifted market sentiment positively.

Ethereum Price Surge Shows Strong Recovery

The Ethereum ETF launch brought considerable trading volume and investor attention. Despite the strong debut, Ethereum’s price experienced a 13.37% drop from July 22 to July 26 as traders took profits. The market reacted positively to Donald Trump’s speech at the Bitcoin Conference 2024 on July 27, which fueled a bullish reversal.

On July 29, ETH’s price surged to $3,345, reflecting an 8.74% increase in three days. This rise suggests renewed investor confidence and an optimistic outlook for Ethereum. Analysts expect Ethereum to approach the $3,500 resistance level in the near future.

The initial outflow and subsequent price drop are seen as typical market behavior, reflecting a potential shakeout of weaker investors. This pattern resembles Bitcoin’s post-ETF dip in January, which led to a significant rally. Ethereum’s recent price movement indicates a potential for recovery and further gains in the coming weeks.

ETH Price Surge Accompanied by Volume Drop

Currently, Ethereum has a bullish sentiment with a 3% surge in the price charts. ETH price has increased by 4.05% and is currently exchanging hands at $3,383. ETH bulls have established support and resistance levels at $3,252.14 and $3,396.63, respectively.

The 24-hour trading volume of ETH has decreased by 19.78%, suggesting that bearish sentiment might emerge soon. This volume decline reflects a reduction in trading activity and could influence short-term price movements. Market watchers should be attentive to potential volatility in the near future.

Recent data from CryptoQuant highlights a $1.5 billion increase in ETH open interest over the past three weeks. This surge in leveraged trading often results in heightened volatility and possible liquidations. Consequently, Ethereum might experience significant price fluctuations in the coming days.

#Ethereum Open Interest data has increased by approximately $1.5 billion in the last 3 weeks

“As leveraged trading increases, liquidations become inevitable. This, in turn, brings high volatility. Therefore, I believe that OI is one of the data points that needs to be closely… pic.twitter.com/XTNz8sDuZU

— CryptoQuant.com (@cryptoquant_com) July 29, 2024

US ETH ETFs See $1.183 Billion Inflow

According to James Butterfill, Head of Research at CoinShares, US spot Ethereum ETFs, excluding Grayscale’s ETHE and ProShares’ EETH, saw a net inflow of $1.183 billion for the week ending July 26, 2024. Despite net outflows from some ETFs, this inflow underscores growing investor interest in Ethereum.

Grayscale’s ETHE experienced a significant net outflow of $1.513 billion, while ProShares’ EETH saw $8 million in withdrawals. Despite these withdrawals, BlackRock’s ETHA and Fidelity’s FETH attracted substantial new investments. ETHA received $453 million, and FETH saw $224 million in inflows, indicating a positive trend in broader Ethereum ETF investments.

Also Read: Bitcoin Sees $519M Inflows, Ethereum ETFs Post Mixed Results