Ethereum has been slowly regaining bullish momentum. This increase is fueled by huge inflows into US spot ETH exchange-traded funds (ETFs) and the recent drop in exchange reserves. True, investor confidence in the current number two coin is booming. This resurgence follows a stretch of moderate outflows and general market malaise. The cryptocurrency is at a critical juncture now as it readies itself to head into major resistance levels.

ETF Inflows Surge, Driving Optimism

Ethereum ETFs have staged a spectacular comeback!!! They’ve witnessed $528.12 million in inflows into US spot ETH exchange-traded funds, on pace to secure their strongest weekly performance since December 2024. This increase further highlights Ethereum’s institutional appeal, a fact that makes Eth a strong investable asset. Strong inflows show that professional investors are starting to view Ethereum as a strong long-term investment. This trend is probably due, in large part, to their enthusiasm for the growth and development that is underway throughout the Ethereum ecosystem.

Ethereum futures ETFs kicked off an amazing 19-day stretch of net inflows. Unfortunately, that momentum was broken on Friday when concerns escalated in the Middle East, resulting in a small outflow of $2.18 million. The big picture All in all, there’s tremendous demand for Ethereum exposure, particularly through ETFs. This underscores the increasing acceptance of cryptocurrencies in traditional financial markets. That’s a stunning $583 million in net inflows this week for Ethereum ETFs. This new wave only serves to reinforce the strong positive sentiment that’s building around Ethereum.

Exchange Reserves Hit All-Time Low

Further building on this bullish narrative, Ethereum exchange reserves have collapsed to an all-time low of 18.57 million ETH. This downturn represents a sharp break in the direction of professionalization to one of accumulation. Investors are taking their Ethereum off of exchanges, which usually indicates an expectation of price appreciation in the future. When these exchange reserves go down, there’s less supply of Ethereum available for people to buy, putting upward pressure on its price.

The ongoing drop in Ethereum supply on exchanges suggests that more investors are taking a long-term holding approach. Over the past 24 hours, Ethereum exchange reserves fell from 18.72 million ETH on Saturday to an all-time low today. What this trend does very well is emphasize the dwindling supply and increasing rarity of Ethereum itself.

Technical Analysis and Price Outlook

Yet even with this good news, Ethereum faces technical hurdles as it hits rejection at the 200-day Simple Moving Average (SMA). Nevertheless, the cryptocurrency has shown some significant strength in maintaining the $2,500 support level for the past few days. Ethereum might successfully re-acquire the 200-day SMA as a support floor. If so, there’s a high likelihood that it will go on to retest that important resistance at $2,850.

In case the price rejects at the $2,850 level, it may lead to the formation of a double-top pattern. This particular formation is widely regarded as a bearish indicator. Under this confluence of increasing buying could set the stage for a powerful price correction. It's crucial for traders and investors to monitor these key levels closely to gauge the direction of Ethereum's price movement.

Ethereum saw the most liquidations, with $134.04 million in futures liquidations in the last 24 hours. It was no surprise, as long liquidations totaled $70.55 million compared to short liquidations of just $63.49 million. Username @EmpireFan, Twitter These liquidations further underscore the mythical, cowpoke, Wild West volatility of the Ethereum, and the double-edge sword of leveraged trading.

"It's also good to see that the rules around staking and new stablecoin-related ETFs are coming into effect, which is helping to boost investor confidence." - Tracy Jin

"Ethereum's recovery is being supported by the 'digital oil narrative and ecosystem fundamentals, like the Pectra upgrade and increased stablecoin activity, with almost 50% of all stablecoins on the Ethereum network." - Tracy Jin

"ETH could be between $2,800 and $3,600 by the end of the year, with the possibility of going even higher if ETF staking and network developments speed up." - Tracy Jin