Key Points
- Ethereum ETFs have begun registering positive net flows, indicating a potential shift in demand.
- Despite the positive inflows, weak demand and sell pressure may still influence Ethereum’s price action.
Ethereum ETFs had a rough start with significant outflows in the initial days. However, recent data suggests a possible change in the tide.
For the first time in nine days, Ethereum ETFs have recorded positive net flows in the past 24 hours. This development comes after a period of outflows that coincided with sell pressure on Ethereum’s price.
Factors Influencing Ethereum’s Price Action
While the positive inflows for Ethereum ETFs could indicate a bullish outlook, it is not the sole determinant. Over the past five days of July, the cryptocurrency has seen some bullish relief. This could be due to re-accumulation at crucial Fibonacci retracement levels, with a resurgence of demand observed between the 0.5 and the 0.618 Fibonacci levels.
The 20-day Moving Average indicator crossing above the 50-day MA, often viewed as a bullish sign, could also contribute to Ethereum’s bullish relief. Additionally, market data like the FOMC data and FED announcement on interest rates can impact the demand level in the market. For instance, anticipated rate cuts could boost investor sentiment in favor of the bulls.
Ethereum ETFs and On-chain Data
When examining Ethereum’s on-chain data, the exchange reserves have increased by 341,374 ETH in the past four weeks. This could explain why the bulls have struggled during this period. There’s also been a decrease in active addresses.
Interestingly, there has been a rise in active receiving addresses from July 28 and a drop in active sending addresses during the same period. This could indicate a resurgence in demand. However, with exchange reserves still at a monthly high, the demand remains weak.
In the past five days, ETH exchange inflows have decreased, explaining the slowdown in sell pressure. However, a similar slowdown has also been observed in exchange outflows.
This could possibly be due to market fear. The sell pressure post-ETF approval might still push prices lower, and investors could be waiting for a clear sign of bearish exhaustion. A strong resurgence in demand for Ethereum ETFs and a pivot in exchange reserves could provide this confirmation.
