Despite the recent uptick that ushered in Ethereum (ETH) flirting with the $4,000 threshold, the second-ranking cryptocurrency is enjoying a wave of new enthusiasm and influx, stirred by the US Securities and Exchange Commission’s (SEC) green-lighting of Ethereum ETF applications from major asset managers.
In a report issued by CoinShares, it’s noted that digital asset investment products have enjoyed a surge of $2 billion inflows, feeding into a healthy five-week run of consecutive inflows worth a staggering $4.3 billion. There is no shortage of action on the trading floors either. As trading volumes in exchange-traded products (ETPs) soared to $12.8 billion last week alone, marking an impressive 55% increase from the week before.
What’s noteworthy about these inflows is their broad reach across the market, indicating a fundamental turnaround in sentiment. Seasoned providers are also witnessing a slackening of outflows, further solidifying the prevailing positive market sentiment.
Bitcoin (BTC), the reigning cryptocurrency, continues to outperform the rest, raking in inflows of over $1.97 billion. While short Bitcoin products have been experiencing continual outflows for the third week running, totaling at $5.3 million.
Ethereum, on the other hand, has seen a significant surge in inflows, with its week becoming its most profitable since March. The total of $69 million in inflows, according to CoinShares, is likely attributed to the surprising SEC decision to approve spot-based ETFs on Ethereum.
Despite the optimistic developments, Ethereum’s price has hit turbulent waters. The cryptocurrency’s price struggled to maintain bullish momentum and failed to match its yearly high of $4,100, which was achieved in March. Friday saw it dipping to as low as $3,577.
However, there is some good news for Ethereum. The number of Ethereum addresses holding upwards of 10,000 ETH swelled by 3% in just three weeks, indicating an influx of buying pressure.
Predictions on Ethereum’s future price action are causing a stir amongst market analysts. ‘Trader Tank’ has projected a price slide to $3,500, while acknowledging the potential for a bullish bounce-back to $3,700.
Crypto analyst, Lark Davis points out that Ethereum’s supply on exchanges stands at an eight-year-low. He suggests that the impending ETFs could trigger a ‘massive supply shock’ that could kickstart a substantial surge in ETH’s price.
As Ethereum’s price flirts with the zone of uncertainty, market players wait with bated breath to see how the cryptocurrency will stir next. The big question of whether we can expect a breakout above $4,000 or a regression to the lower support levels of $3,500 remains.
Currently, Ethereum, the second-largest cryptocurrency on the market, is hovering around $3,690, marking a 6.5% decrease in the past two weeks. Time, as they say, will tell.