Ethereum at $3,000 Amid Record ETF Inflows, But Derivatives Markets Signal Caution
Ethereum (ETH) has made a stunning recovery, rising more than 15% in just three days to reach the psychologically important $3,000 threshold
Quick overview
- Ethereum has surged over 15% in three days, reaching close to the $3,000 mark, driven by strong institutional inflows and Bitcoin's performance.
- Record inflows into Ethereum ETFs, totaling $468.63 million over four days, have significantly contributed to the recent price rally.
- Despite the price increase, traders remain cautious, as the Ether monthly futures premium indicates a neutral-to-bearish sentiment.
- For Ethereum to sustain its rally above $3,000, increased network activity and institutional demand are essential, especially with upcoming stablecoin legislation.
Ethereum ETH/USD has made a stunning recovery, rising more than 15% in just three days to reach the psychologically important $3,000 threshold. The second biggest cryptocurrency in the world is currently trading slightly under $3,000, up 6.7% in the last 24 hours. It has achieved five-month highs thanks to a mix of Bitcoin’s strength and significant institutional inflows.
Record Ethereum ETF Inflows Fuel Rally Despite Trader Skepticism
The latest rise has mostly been caused by record-breaking demand from Ethereum exchange-traded funds (ETFs) that are listed in the US. These funds had net inflows of $468.63 million over four days in a row. On Wednesday, there were $211.32 million in net inflows. BlackRock’s iShares Ethereum ETF (ETHA) had a huge 4x surge in daily volumes, bringing the total to over $800 million.
Even when prices are going up, skilled traders are still being careful. The Ether monthly futures premium is only 5% right now, which is just above the neutral-to-bearish level. This lukewarm institutional opinion is very different from the excitement among ordinary investors, as futures markets don’t seem too sure that ETH can keep its run beyond $3,000.
ETH Corporate Treasury Adoption Provides Additional Support
Since June, five businesses listed on the Nasdaq have disclosed Ethereum treasury plans valued more than $1 billion in total commitments. This is a sign of optimistic momentum. SharpLink Gaming (SBET), Bit Digital (BTBT), BitMine (BMNR), GameSquare (GAME), and BTCS are some of the most well-known companies who have adopted ETH as a treasury asset. This shows that more and more companies trust ETH as a treasury asset.
This trend of institutions adopting new technologies is in line with advances in regulation, especially the GENIUS stablecoin law, which has passed the Senate and is waiting for a vote in the House. Ethereum is the most popular stablecoin, with 50% of the worldwide market and executing over $4 trillion in stablecoin transfers in the second quarter. Clear regulations might greatly increase demand.
ETH/USD Technical Analysis: Breakout Above Key Resistance Targets $3,200
Ethereum has successfully broken over the important $2,850 resistance level for the first time since February 4, clearing the top edge of a symmetrical triangle shape. There has been a lot of volume and momentum behind the breakout, and both the RSI and Stochastic Oscillator are now in overbought area.
Watch for immediate resistance at $3,000. If it breaks through that level, it might go up to $3,200 in the near future. The trend line support level is $2,880, the old resistance turned support level is $2,850, and the primary support zone is $2,750.
Ethereum Network Fundamentals Present Mixed Signals
Even though the price has gone up, Ethereum’s network principles are hard to understand. Over the previous three months, Total Value Locked (TVL) has gone up from $50 billion to $73 billion. However, network fees have gone down by 22% to $34.8 million, which lowers ETH’s burn rate through the network’s deflationary mechanism.
The layer-2 ecosystem is still doing well, with DEX volumes of $58.6 billion over the past 30 days. But this move to cheaper alternatives hasn’t led to more demand for ETH itself, since DEX volumes on the main network have declined to their lowest levels in nine months.
Ethereum Price Prediction: Cautious Optimism
Ethereum looks like it could go up even more if it can stay above the $2,850 support level, given how the market is right now. Strong ETF inflows, companies using treasury, and a technical breakout all point to a possible move toward $3,200 in the near future.
But traders should still be careful because the derivatives markets are sending confusing signals and network fees are going down. The options market is showing neutral sentiment, with a delta skew of -3%. This means that advanced traders don’t strongly believe in either a bullish or bearish market.
In order for ETH to have a long-lasting rally above $3,000, network activity needs to go up, which will lead to more fees and ETH burns, as well as continued demand from institutions. The imminent House vote on stablecoin legislation could be a big reason for the next phase of Ethereum’s price discovery.
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