The recent spike in the price of Ethereum (ETH) has brought the cryptocurrency close to the $4,000 mark, sparking renewed market enthusiasm. This surge can be attributed to the US Securities and Exchange Commission’s (SEC) approval of Ethereum ETF applications by major asset managers. According to a report by CoinShares, digital asset investment products have seen a total of $2 billion inflows, contributing to a five-week consecutive run of inflows amounting to $4.3 billion.
In addition to the influx of investments, trading volumes in exchange-traded products (ETPs) have risen to $12.8 billion for the week, marking a 55% increase from the previous week. Notably, inflows have been observed across various providers, indicating a turnaround in market sentiment. Incumbent providers have also experienced a slowdown in outflows, further reinforcing the positive outlook on the market.
While Bitcoin (BTC) continues to dominate the market, with inflows totaling $1.97 billion for the week, Ethereum has also seen a significant surge in inflows. With a total of $69 million, Ethereum recorded its best week since March, likely in response to the SEC decision to allow spot-based ETFs on Ethereum. Despite the positive developments, Ethereum’s price has struggled to maintain bullish momentum, dropping to as low as $3,577 on Friday.
Market analysts have provided varying perspectives on Ethereum’s future price action. “Trader Tank” predicts a drop to $3,500 while acknowledging the potential for a bullish reversal upon reclaiming the $3,700 level. On the other hand, crypto analyst Lark Davis highlights Ethereum’s supply on exchanges at an eight-year low, suggesting that upcoming ETFs could trigger a “massive supply shock” and lead to a substantial price increase.
As Ethereum’s price remains uncertain, investors and analysts eagerly await the next movements in the cryptocurrency market. The question of whether Ethereum will break above $4,000 or face a retest of lower support levels at $3,500 remains unanswered. With increased attention and anticipation surrounding Ethereum, market participants continue to closely monitor the dynamic shifts in the crypto market landscape.