Three Factors Supporting Ethereum’s Potential 15% Rally Following Victory Over Bitcoin in ETF Investments
Ethereum’s BlackRock ETF saw a surge in inflows, outpacing Bitcoin by almost $40 million on a particular day. The staked supply of Ethereum has reached 28%, with only 10% of the total supply available on exchanges, indicating a decrease in selling pressure. Maintaining levels above the $3,300 support mark, Ethereum is now setting its sights on achieving double-digit growth, following its peak of $4,093 in 2024 on March 12. The altcoin has been consolidating below this peak for some time, struggling to breach the crucial resistance at $3,500.
Key indicators such as on-chain data and BlackRock’s ETF inflows play significant roles in supporting Ethereum’s bullish outlook. BlackRock’s Ethereum ETF (ETHA) witnessed a substantial $118 million inflow on July 30, surpassing the inflows into the issuer’s Bitcoin ETF (IBIT) by nearly $40 million. This data underscores Ethereum’s dominance in institutional demand, as highlighted by FarSide data. Furthermore, various on-chain metrics also point towards a potential recovery for the altcoin.
Ethereum has shown a notable decline in supply on exchanges. According to data from Glassnode, 28% of the Ethereum supply is staked, while only 10% remains on exchanges. This distribution suggests a lower selling pressure, leaving room for a potential upswing in Ethereum’s value. Data from Santiment reveals that larger whale cohorts holding significant amounts of Ether have been increasing their holdings, anticipating potential gains.
Trading at $3,318 on Binance, Ethereum has broken its downward trend since July 15 and is now aiming to breach the resistance at $3,500. There is a possibility of a 15.16% extension in gains, targeting $3,819, which represents the 78.6% Fibonacci retracement level from the peak of $4,093 to the low of $2,810. However, Ethereum may face resistance at $3,451 and the Fair Value Gap (FVG) between $3,389 and $3,342. A close below $3,300, the 38.2% Fibonacci retracement level, could challenge the bullish scenario, with potential support levels at $3,113 and the psychological mark of $3,000.
In conclusion, Ethereum’s recent performance, supported by strong institutional inflows and on-chain metrics, indicates a positive outlook for the altcoin, potentially paving the way for a significant rally in the near term.
