Key Takeaways
- Ethereum has enjoyed 9 consecutive weeks of ETF inflows thanks to the stablecoin and tokenization narrative. But can bulls flip $3K resistance into support?
Ethereum [ETH] has become a Wall Street darling lately, despite Bitcoin attracting all the market attention. In fact, since mid-May, U.S Spot ETH ETFs have seen nine consecutive weekly net inflows.
Source: Soso Value
That’s not all though as daily ETF inflows on 10 July hit $383.10M, bringing this week’s demand to $703 million (before factoring Friday’s inflows).
Overall, this weekly inflow could rival late 2024 inflows, which lifted ETH to $4K.
Tokenization boosts ETH
In a recent report, Fidelity compared ETH to a currency of an emerging economy, and not as a tech stock as previously held by Wall Street analysts. In doing so, the asset manager argued that ETH fuels DeFi, acts as collateral, and can earn dividends via staking.
On top of this bullish report, the stablecoin and tokenization narratives have grown significantly too.
Additionally, Bitwise recently projected that the tokenized market could grow by 4000x in the next few years. Hence, ETH might be one of the major ways to gain investment exposure.
Similarly, stablecoins, which have also attracted massive attention from Wall Street, are expected to fuel ETH too. For example – Fundstrat’s Tom Lee is betting big on the stablecoin boom that is driving the ETH treasury strategy for a former BTC-focused BitMine Immersion Technologies.
And the reasoning is simple – Ethereum controls 50% of the stablecoin market. And, over 75% of current tokenized treasuries.
Source: RWA
Meanwhile, with BTC at a record high, analyst Ken Teng (Chicken Genius) believes that ETH could hit $4k sooner. He said,
“We trend until end July. BTC makes new ATH again, ETH near $4K, rotation is your friend.”
The overall selling pressure dynamics somewhat leaned towards Teng’s projection too.
According to the Exchange Inflow metric, the number of coins being moved for sell-off has declined sharply in July. This coincided with ETH’s surge from $2.2k to $3k too.
Source: CryptoQuant
If the low sell pressure trend extends itself, bulls could attempt to push higher. That being said, ETH’s price might be at a crossroads at the $3k-level. This area was a support backed in 2024 and was lost earlier this year.
Reclaiming it as a support would reinforce a bullish market structure. And the press time value may still be a strong buy, as per the Supertrend indicator.
However, it’s worth noting that the daily RSI entered an overbought zone on the charts. And, the rally could cool off if May’s price action repeats itself.
Source: ETH/USDT, TradingView
