- Ethereum ETFs flipped out of six weeks of negative flows with $85 million in inflows last week.
- Ethereum Foundation has sold 3,766 ETH worth $10.46 million in 2024.
- Ethereum could decline to $2,395 if it sustains an extended move below the $2,595 support level and key SMAs.
Ethereum (ETH) is down 2% on Monday, struggling around the $2,595 key support level after the ETH Foundation continued its selling spree. However, the slow price movement in the past few hours isn't reflective of the rising inflows across US spot Ethereum ETFs.
Daily digest market movers: Ethereum ETFs see weekly net inflows, ETH Foundation continues selling
US spot Ethereum ETFs recorded net inflows of $85 million last week, their first weekly positive flows after six consecutive weeks of outflows, per Farside Investors data. The positive week was led by inflows in BlackRock's ETHA and Fidelity's FETH, totaling $95.5 million and $64.8 million, respectively.
ETHA's inflows also saw it surge past the $1 billion mark in net assets. According to Nate Geraci, President of the ETF Store, the move places it in the top 20% of all 3,700 ETFs in the US within two weeks of launch.
Several crypto community members expect ETH ETFs to continue seeing inflows in October, considering it's historically been a positive month for Ethereum and the entire crypto market.
Meanwhile, the Ethereum Foundation sold 100 ETH for 263,000 DAI on Monday, taking its total sales in 2024 to 3,766 ETH ($10.46 million), per data from blockchain analytics provider Lookonchain.
While several community members have raised concerns about the Ethereum Foundation sales, co-founder Vitalik Buterin shared that the proceeds were targeted toward donating to research and projects to improve the Ethereum ecosystem. The Ethereum Foundation is also preparing a financial report detailing its total spending, according to Ethereum researcher Justin Drake.
ETH technical analysis: Ethereum risk decline if it breaks below $2,595 support and SMAs
Ethereum traded around $2,600 on Monday, down 2% on the day. In the past 24 hours, ETH has seen $29.94 million in liquidations, with long and short liquidations accounting for $24.9 million and $5.04 million, respectively.
On the 4-hour chart, Ethereum is trading within a key rectangle channel after seeing a rejection around the resistance at $2,707 on Friday. This marks the second time prices have failed to move past the $2,707 level.
ETH/USDT 4-hour chart
In the early hours of Monday, the $2,595 support level prevented a further decline. A retest of this level could see the support fail, especially after ETH crossed below its 50-day Simple Moving Average (SMA).
If ETH declines, the 200-day and 100-day SMAs could provide support on the way down. However, ETH could fall to $2,395 if SMA support fails to hold.
The Relative Strength Index (RSI) is below its neutral level, and the Stochastic Oscillator is approaching the oversold region, indicating rising bearish momentum.
A candlestick close above $2,707 will invalidate the slightly bearish thesis.
Ethereum development FAQs
After the Merge, the Ethereum community is looking at the Sharding upgrade next, which has been slated for sometime later in the year. The development can be summarized in four words, “scalability through more efficient data storage.” The software update will increase the capacity of the blockchain, widening the amount of data that can be stored or accessed. At the same time, all services running atop the Ethereum blockchain will enjoy significantly reduced transaction fees.
A fork is the splitting of a blockchain after developers agree and proceed to implement upgrades. The decision comes after these developers reach a consensus for a software upgrade. The ensuing part will see one part continue with the status as is, while the other one will proceed with new features combined with the former ones. A hard fork basically entails permanent divergence of a new side chain from the original one, while a soft fork is doing the same, only difference being that it is temporary.
EIP-4844 is an improvement proposal for the Ethereum network. The upgrade promises reduced gas fees, which is a valuable offering considering the high transaction cost that continues to daunt crypto players. It has been a long-standing concern for the Ethereum network. The proposal is also referred to as “proto-Danksharding,” with an unmatched ability to increase the speed of transactions on the Ethereum blockchain. At the same time, it helps to reduce the transaction cost as everything becomes decentralized.
Gas token is a new, innovative Ethereum contract where users can tokenize gas on the Ethereum network. This means they can store gas when it is cheap and start to deploy the gas once the market has shifted to the north. The use of Gas token helps to subsidize high gas prices on transactions, meaning investors can do everything from arbitraging decentralized exchanges to buying into initial coin offerings (ICOs) early.
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