Ethereum ETF and stock market investors step up buying pressure after rally in key stocks

• The Ethereum ETF saw inflows of $11.4 million after five consecutive days of outflows.
• Net Ethereum exchange flows indicate heavy buying pressure after outflows of 177,000 ETH over the past two days.
• Ethereum’s sideways movement and historic Q3 market slump could turn out to be the “calm before the storm.”

Ethereum (ETH) fell 1% on Wednesday as investors stepped up their buying pressure through exchange-traded funds (ETFs) and exchanges. This could be due to the potential for ETH to rise after the end of the historical market lull in Q3.

Daily Market Reasons: ETH ETF Returns to Entries, Exchange Flows Point to Buying Pressure

Ethereum ETFs saw inflows of $11.4 million on Tuesday, ending their five-day outflow. Flows came from BlackRock’s ETHA and Fidelity’s FETH, with inflows of $4.3 million and $7.1 million, respectively. Other issuers recorded zero flows. One potential reason for the inflows is that Grayscale’s ETHE is seeing zero flows, highlighting its factor in the net flow performance of ETH ETFs.

Ethereum exchange net flows also indicate a similarly bullish sentiment after seeing net flows of over 177,000 ETH worth around $416 million over the past two days, according to CryptoQuant data.

ETH exchange net flow

Net exchange flows are the cumulative difference between currencies entering/exiting an exchange. Unlike ETF flows, outflows indicate high buying pressure and vice versa for inflows.

As a result, net exchange outflows of 177,000 ETH indicate that investors are returning to the market with heavy buying pressure. Additionally, the net flow of the ETH exchange 30-day Simple Moving Average (SMA) also indicates rising outflows since August. This suggests that the buying pressure of ETH has exceeded the selling pressure over the past month.

However, ETH whale trades (>$1 million) have dropped considerably in recent weeks.

ETH Technical Analysis: Ethereum’s Consolidation Could Turn Out To Be The ‘Calm Before The Storm’

Ethereum is trading around $2,340 on Wednesday, down 1% on the day. Over the past 24 hours, ETH has seen more than $42 million in liquidations, with long and short liquidations accounting for $34.66 million and $7.72 million, respectively, according to Coinglass data. Notably, a long position was liquidated for $11.82M following a brief drop to $2,278.

On the daily chart, ETH is trading below a descending trendline in a triangle of symmetry that suggests its price could drop towards the $2,100 to $2,200 range in September before staging a rally.

ETH saw similar declines from August to November 2022 and from July to October 2023 before finally seeing a rally. The move also aligns with ETH’s historic Q3 market lull. If history repeats itself, ETH’s current consolidation could turn out to be the “calm before the storm.”

ETH/USDT Daily Chart

On the other hand, ETH is facing key resistance around the $2,817 level, which is the upper horizontal line of a key rectangular channel where prices have remained since August. The descending 50-day simple moving average (SMA) could also strengthen this resistance.

The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) momentum indicators are just below their neutral levels, indicating weakened upward pressure.

A daily candlestick close below $2,000 would invalidate the thesis.

In the short term, ETH could drop to $2,271 to liquidate $35.44M worth of positions.