Persistent inflows into spot Ethereum ETFs, falling ETH exchange reserves, and bullish derivatives data support ETH’s outlook, while price action suggests the asset could reach $3,030.
Ethereum (ETH) seems to be gaining widespread attention from market participants, including traditional and crypto investors. Over the past week, spot ETFs have recorded persistent inflows, while a notable decline in ETH exchange reserves suggests growing demand for the asset.
Institutional demand for Ethereum has remained strong this week. According to analytics platform SoSoValue, U.S. spot Ethereum ETFs have recorded six straight days of inflows, attracting a total of $686.88 million during this period.
Alongside consecutive ETF inflows, crypto investors have also shown strong interest in Ethereum, as reflected in data from analytics platform CryptoQuant. The latest metric shows that Ethereum’s exchange reserves across all exchanges have declined notably from 14.825 million ETH to 14.638 million ETH, a fall of 187,000 ETH.
This decline in ETH reserves on exchanges typically points to potential accumulation, which is a bullish signal and suggests reduced sell-side supply and potential accumulation.
Despite these bullish developments, the ETH price remains sideways. In fact, it has gained a modest 1.35% over the past week. At press time, the asset trades near the $2,675 level, down 0.25% over the past 24 hours.
Alongside the price, ETH’s trading volume also declined 65% to $4.91 billion, indicating a lack of market participation amid the sideways momentum.
These developments together raise questions about what’s next for the ETH price: will it continue to move sideways, or is a further upside or downside move on the horizon?
TradingView’s daily chart suggests that ETH is in an uptrend, as it recently broke out of a consolidation zone and continues to trade above the 200-day Exponential Moving Average (EMA), indicating that the broader bullish trend remains intact.
However, over the past week, the asset has continued to move sideways after a decent upside move, which suggests a potential correction.
Based on the current price action, if ETH remains above the $2,565 level, its bullish outlook remains intact. In this scenario, the asset could resume its upward momentum and may reach the $3,030 level, which is the next resistance level. However, ETH’s bullish outlook could be invalidated if the asset falls back into the consolidation zone or below the $2,565 level.
At press time, ETH’s Average Directional Index (ADX) climbed to 44.58, above the key threshold of 25, indicating strong trend strength.
From the derivatives perspective, ETH appears bullish, as intraday traders appear to be strongly favoring long positions. According to CoinGlass, ETH’s long/short ratio stands at 1.3026, above 1, indicating strong bullish sentiment among traders.
Meanwhile, $2,637.5 on the lower side and $2,715.9 on the upper side are the two key levels where intraday traders are overleveraged. In fact, traders at these levels have built $288.26 million worth of long positions and $203.71 million worth of short positions.
These positions could be liquidated if the ETH price moves in either direction. Data suggests that if current market sentiment remains intact and the asset rallies above $2,715.90, $203.71 million in short positions could be liquidated. However, if sentiment shifts and the price falls below $2,637.50, $288.26 million in long positions could be liquidated.
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