Ethereum Foundation sheds holdings after ETH ETFs record net inflows
|- Ethereum ETFs' net flows turn positive after a four-day streak of strong outflows.
- Ethereum Foundation resumed its ETH sale following 100 ETH transfer to exchange.
- Ethereum is showing signs of a potential bullish reversal.
Ethereum (ETH) is down 0.2% on Wednesday following inflows across ETH ETFs and the Ethereum Foundation's continuation of its ETH sale.
Daily digest market movers: ETH inflows, Ethereum Foundation sale
BlackRock's iShares Ethereum ETF (ETHA) charged ETH ETFs to witness their first day of net inflow since the positive flows on launch day after recording $118 million in inflows, offsetting outflows from Grayscale's Ethereum Trust (ETHE), according to Farside Investors data.
As a result, ETHA broke into the top 15 based on inflows among 330 ETFs launched in 2024, noted Nate Geraci, President of the ETF Store, in an X post on Tuesday. The move pushed the nine spot Ethereum ETFs to a net inflow of $33.67 million.
Ethereum ETF Flow Table
According to data from Spot On Chain, the Ethereum Foundation sold 150 ETH for 487,260 DAI today. This follows its earlier sale of 100 ETH on July 23 when spot ETH ETFs launched. The Ethereum Foundation has sold 2,516 ETH for 7.4M DAI at an average price of $2,940 in 2024.
Historically, most of the Foundation's sales have led to price declines as it appears traders are using its on-chain activity as a proxy to short or sell their tokens.
However, with investors now expecting a price rise following a decline in ETHE outflows, the Foundation's ETH sale may not trigger a price decline this time. This is evidenced in Glassnode's data, which reveals that whales — wallets holding over $100K worth of ETH — purchased about 126,000 ETH worth $440 million in the past two days. Such high buying pressure indicates whales are anticipating a bull run.
Meanwhile, Ethereum co-founder Vitalik Buterin said in a speech at EDCON2024 that Ethereum will focus on building applications in the next 10 years. Some notable crypto applications Ethereum pioneered include DeFi, NFTs, DAOs, DID, etc.
ETH technical analysis: Ethereum signals bullish move
Ethereum is trading around $3,277 on Wednesday, down 0.2% on the day. ETH's 24-hour liquidations crossed $30 million, with long and short liquidations accounting for $21.81 million and $8.21 million, respectively.
Ethereum's 50-day moving average is above its current price and acts as a resistance to upward price movements. However, ETH is forming a rounded bottom, indicating a potential bullish reversal in the coming weeks.
ETH/USDT Daily chart
A daily candlestick close above the $3,730 resistance could provide ETH with the needed momentum to rally above its yearly high of $4,093. Such a move could see ETH rising to set a new all-time high around $5,627 — the upper side of a key boundary.
In the short term, ETH could decline to bounce around $3,243 where there's a liquidation wall of $35.58 million.
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
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