Ethereum ETF and Exchange Investors Increase Buying Pressure After Surge in Key Metrics
Ethereum experienced a 1% decline on Wednesday as investors showed increased buying activity through exchange-traded funds (ETFs) and exchanges. This surge in buying pressure could signal a potential rally for Ethereum following the conclusion of its typical Q3 market lull.
In recent developments, Ethereum ETFs saw a notable shift, with $11.4 million in inflows recorded on Tuesday, breaking a streak of five consecutive days of outflows. The influx came primarily from BlackRock’s ETHA and Fidelity’s FETH, amounting to $4.3 million and $7.1 million, respectively. Interestingly, Grayscale’s ETHE did not witness any flows, highlighting its impact on the overall performance of ETH ETFs.
Moreover, data from CryptoQuant revealed significant net outflows of over 177,000 ETH, equivalent to around $416 million, from Ethereum exchanges over the past two days. This trend suggests a bullish sentiment among investors, as outflows typically indicate heightened buying pressure.
The 30-day Simple Moving Average (SMA) of ETH exchange net flows has been on an upward trajectory since August, further reinforcing the notion of increasing buying pressure outweighing selling pressure. However, there has been a noticeable decrease in whale transactions involving amounts exceeding $1 million in recent weeks.
Analysts from Santiment suggest that large whales might be waiting for opportune moments to either accumulate more assets during periods of fear, uncertainty, and doubt (FUD) or distribute holdings when fear of missing out (FOMO) is prevalent. This dynamic indicates that Ethereum potentially has room for upward movement, as whales are unlikely to offload their positions at current price levels.
In terms of technical analysis, Ethereum is currently trading around $2,340, with indications pointing to a potential decline towards the $2,100 to $2,200 range in September before a potential rally. Historical data suggests that similar patterns have occurred in previous years during the Q3 market lull, hinting at a possible surge in the near future.
Key resistance for Ethereum is anticipated around the $2,817 level, with the descending 50-day Simple Moving Average (SMA) likely reinforcing this barrier. Momentum indicators such as the Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are hovering below neutral levels, signaling weakened bullish pressure.
To validate the current market sentiment, a daily close below $2,000 would invalidate the bullish thesis, potentially leading to a decline towards $2,271 to liquidate positions valued at $35.44 million. Overall, Ethereum’s recent market dynamics and technical indicators suggest a potential period of consolidation before a potential bullish breakout.
