Ethereum ETF inflows and a low CPI could help boost the ETH stage amid headwinds against Jump Crypto

• Ethereum ETFs post second straight day of inflows amid in-line CPI data.
• Jump Trading moves over $46M worth of ETH into what could be another warehouse.
• The key trend line is holding strong after rejecting Ethereum’s upward move.

Ethereum (ETH) is down 1.7% on Wednesday as weak consumer price index (CPI) inflation data and rising ETH ETF flows indicate that a rally could be imminent. However, a key trend suggests that ETH may repeat history by consolidating for several weeks before starting a new upward move.

Daily Market Reasons: Low CPI, Ethereum ETF Inflows, Potential ETH Jump Crypto Sell

The US consumer price index (CPI) fell to a 2.9% annual rate, below expectations of 3.0, according to data from the Bureau of Labor Statistics (BLS). Following the decline, the probability that the Federal Reserve (Fed) will cut interest rates by 25 basis points at the CME rose to 56.5%.

As a result, Ethereum could see a recovery in the coming weeks as risk assets such as cryptocurrencies thrive in a lower interest rate environment.

On the ETF side, Ethereum ETFs posted net inflows of $24.3 million on Tuesday, marking the second consecutive day of positive inflows for the products.

In particular, BlackRock ETHA saw net inflows of $49.1 million, bringing its total inflows since launch to $950.2 million. Fidelity FETH also had inflows of $5.4 million. Meanwhile, Grayscale ETHE saw $31 million in outflows, extending its cumulative outflows to $2.32 billion.

Ethereum ETF Streams

Several members of the crypto community expressed their sentiment suggesting that Ethereum could stage a rally in the coming weeks if the Fed cuts rates and ETH ETF flows continue.

On the other hand, Jump Trading could resume its potential ETH selling wave after claiming 17,049 ETH worth $46.44 million from the Lido Finance staking protocol, according to Lookonchain data. The trading firm still holds $148 million worth of ETH in Lido Finance and another wallet. Jump began removing over $400 million worth of ETH on August 2nd.

ETH Technical Analysis: Ethereum again faces rejection around key trendline

Ethereum is trading around $2,660 on Wednesday, down 1.7% on the day. Over the past 24 hours, ETH has seen liquidations of over $46.27 million, with long and short liquidations accounting for $29.44 million and $16.83 million, respectively.

On the daily time frame, Ethereum attempted to break above the downtrend line since May 27, but saw a rejection around the $2,799 resistance level. The rejection led to a bearish short-term view of the trendline as it suggests that ETH could drop to a low between $2,000 and $2,100.

As previously discussed, ETH posted similar moves from August 2022 to November 2022 and from July 2023 to October 2023. If history repeats itself, ETH will not be able to break the trendline resistance until September.

ETH/USDT Daily Chart

A successful completion of this move could see ETH record a new rally following a three-year bullish triangle that started in late 2021. On the other hand, ETH faces resistance around the simple moving average (SMA ) of 100 days and the following 200 days. a “Cross of Death” on August 8. A “Death Cross” is considered a bearish divergence signal and occurs when a lower timeframe SMA crosses over that of a higher timeframe.

The relative strength index is at 40, trending lower. This suggests that the market is consolidating with a slight bearish bias.

A daily close of the candlestick below the bottom of the triangle may invalidate the short-term bullish outlook.

In the short term, ETH could drop to $2,621, where there is a liquidation wall of $38.33 million.