Ethereum
ETH outflows, whale deposits, US government action
- Global Ethereum ETF outflows threaten expectations of a successful ETH spot ETF launch.
- ICO whale and US government hint at ETH sale after recent transfers.
- Ethereum’s historical returns in July could attract bulls as the ETH spot ETF launch approaches.
Ethereum (ETH) is up more than 2% on Monday despite increased outflows from global ETH ETF products and exchange deposits from major whale wallets.
Daily Market Movements Summary: Ethereum Outflows, Whale Transfers
In an article published on X on Monday, Nate Geraci, president of the ETF Store, predicted that spot Ethereum ETFs would be the second most successful ETF debuts in history behind spot Bitcoin ETFs.
However, flows into global Ethereum investment products suggest otherwise. According to CoinShares, global Ethereum ETFs saw outflows of $61 million last week, the highest level since August 2022. This brings its two-week net flows to $119 million in outflows.
CoinShares noted that the move places ETH as the worst-performing digital asset this year in terms of net flows. ETH net flows could turn positive in the coming weeks if the Securities & Exchange Commission (SEC) approves issuers’ S-1 plans in the United States.
On May 23, the SEC approved 19b-4 filings from potential issuers of spot ETH ETFs, but must also greenlight their S-1 registration statements before the ETFs can begin trading.
According to Wu Blockchain, an ICO whale transferred 7,000 ETH worth $24.8 million to the Kraken exchange in the last 24 hours after being silent for 209 days. The whale’s wallet still has over 40,000 ETH, worth about $139.5 million, in its possession. Notably, the whale purchased 254,900 ETH at an average price of $0.311 during its ICO in 2014.
Historically, long-term holders becoming active often indicates that the market is nearing the peak of a bull cycle.
Additionally, an address linked to the US government transferred 3,375 ETH to an unknown address, according to Arkham Intelligence. The address contains funds seized from Estonian duo Potapenko and Turogin, who were extradited to the US for an alleged $575 million Ponzi scheme.
ETH Technical Analysis: Ethereum’s Historical Returns in July Could Attract Bulls
Ethereum is trading around $3,469, up more than 2% in the past 24 hours as the cryptocurrency market looks set to rally. The price rally has wiped out over $20 million in ETH short positions from the market, while long positions have seen only minor liquidations of around $4 million.
Ethereum’s positive start to the month aligns with its average July returns since launch. Coinglass data shows that Ethereum has an average return of 6.28% over the month. Over the past four years, the number one altcoin has only finished July with a loss in 2023.
ETH/USDT 4-Hour Chart
Moreover, Ethereum seems poised for growth as ETH spot ETFs could be launched in the coming days. As a result, ETH could test the $3,629 resistance, which it has failed to surpass in the past three weeks. A break of the key $3,203 support would invalidate the bullish thesis.
Ethereum FAQ
Ethereum is an open-source, decentralized blockchain with smart contract capabilities. Serving as the backbone network for the cryptocurrency Ether (ETH), it is the second-largest cryptocurrency and the largest altcoin by market capitalization. The Ethereum network is designed for scalability, programmability, security, and decentralization, attributes that make it popular among developers.
Ethereum uses decentralized blockchain technology, through which developers can create and deploy applications independent of central authority. To facilitate this task, the network has a programming language that helps users create self-executing smart contracts. A smart contract is essentially a code that can be verified and allows transactions between users.
Staking is a process by which investors grow their portfolios by locking up their assets for a set period of time instead of selling them. It is used by most blockchains, especially those that use the Proof of Stake (PoS) mechanism, where users earn rewards as an incentive to stake their tokens. For most long-term cryptocurrency holders, staking is a strategy for generating passive income from your assets, by putting them to work in exchange for generating rewards.
Ethereum transitioned from a Proof-of-Work (PoW) mechanism to a Proof-of-Stake (PoS) mechanism in an event dubbed “The Merge.” This transformation occurred as the network sought to achieve greater security, reduce its energy consumption by 99.95%, and implement new scaling solutions with a possible threshold of 100,000 transactions per second. With PoS, there are lower barriers to entry for miners given the reduced energy requirements.