Ethereum investors show bullish bias amid positive ETF inflows and funding rates, currency reserves pose risks

• Ethereum ETF inflows and positive funding rates could help maintain bullish momentum.
• Investors should watch out for the increase in ETH’s currency reserve.
• Ethereum could retest the $2,707 resistance after giving up the 50-day SMA.

Ethereum (ETH) traded around $2,640 on Thursday, up more than 2% on the bullish trend among investors, as evidenced by net ETH ETF inflows and an upward trend in funding rates. However, investors may be wary of a potential correction in ETH’s growing currency reserve.

Ethereum ETF inflows and positive funding rates present a bullish outlook

Ethereum ETFs saw net inflows of $43.2 million on Wednesday, bringing their total flows over the past two days to over $105 million. BlackRock’s ETHA and Grayscale Mini Ethereum Trust were largely responsible for the positive flows, with inflows of $9.4 million and $26.6 million, respectively.

The high flows follow renewed investor interest in Ethereum since the US Federal Reserve’s (Fed) decision to cut rates by 50 basis points (bps) on September 18.

Several investors previously predicted that the poor performance of ETH ETFs was due to their launch during the summer holiday season. As investors return from vacation and a historically positive IV season approaches, ETH ETFs may begin to see more inflows – especially if Grayscale’s ETHE exodus cools.

The bullish outlook is supported by a move to an uptrend in Ethereum’s 30-day Simple Moving Average (SMA).

Funding rates are periodic payments between perpetual traders to maintain parity between an asset’s spot price and futures contracts. A positive funding ratio indicates dominant long positions in the market, while the reverse for a negative funding ratio.

Ethereum Exchange Funding Rates

Since hitting a low on September 3, the 30-day SMA funding rate has risen, indicating growing bullish sentiment among traders.

However, investors should be wary of ETH’s rising currency reserve, which has taken a slightly upward turn over the past month. The increase in foreign reserves could lead to increased selling pressure and a subsequent fall in prices.

Ethereum exchange reserve

Ethereum is finding support around the 50-day SMA

Ethereum traded around $2,640 on Thursday, up 2.6% on the day. Over the past 24 hours, ETH has seen over $21 million in liquidations, with long and short liquidations accounting for $7.47 million and $13.97 million, respectively.

On the 4-hour chart, Ethereum reclaimed the $2,595 support after giving up the 50-day SMA. If the bullish momentum continues, ETH could rise to test the $2,707 resistance. A successful move above this level could see ETH reclaim its $2,817 price level, which it has held as a key support level for over four months.

The relative strength index (RSI) and momentum indicators of the stochastic oscillator are above their neutral levels, indicating an uptrend.

ETH/USDT 4 Hour Chart

On the downside, if ETH breaks above the $2,595 level, the 50-day, 100-day and 200-day SMAs could provide price support. A daily candlestick close below $2,395 will trigger a strong bearish push for ETH.