Ethereum (ETH) Shows Mixed Signals Amid Recovery Attempts

Ethereum (ETH) shows mixed signals as derivative markets hint at easing selling pressure, while spot markets continue to face challenges.

Despite ETH’s attempts at price recovery and positive funding rates, Ethereum ETFs are experiencing significant outflows, raising concerns about investor interest in contrast to Bitcoin ETFs’ maintained net inflows.

Easing Selling Pressure in ETH Derivatives Market

Recent exchange data suggests that selling pressure on Ethereum (ETH) may be easing in the derivatives market. According to CryptoQuant, ETH netflow on derivative exchanges surpassed 40,000 ETH on September 7th. This increase in withdrawals from derivative exchanges indicates a potential reduction in selling pressure and less interest from traders in opening short positions.

Ether Spot Market Continues to Face Challenges

Despite the positive signs in the derivatives market, the spot market for Ethereum continues to experience selling pressure:

The Ethereum Foundation recently sold 450 ETH for $1 million worth of DAI, with total sales of $1.28 million in ETH over the past four days.
Metalpha, a Hong Kong-based crypto wealth manager, deposited over $54 million worth of ETH to Binance in the last three days.

However, there are signs that selling momentum may be weakening. ETH exchange inflows reached 37,415 ETH on September 8th, the lowest level since late July.

Ethereum ETFs Face Significant Outflows

Concerns are growing about investor interest in Ethereum ETFs, as they have experienced significant outflows:

• On September 6th, ETH ETFs saw a net outflow of $6 million.
• Grayscale’s ETHE has faced substantial outflows, pushing the overall net flow into negative territory.

Several factors may be contributing to this trend:

• Lack of staking yield compared to direct ETH holdings
• Declining Ethereum-to-Bitcoin ratio
• Migration to Layer 2 solutions and alternative Layer 1 blockchains
• Ethereum’s inflationary nature
• Reduced Layer 2 transaction fees following recent upgrades

Bitcoin ETFs Maintain Net Inflows

In contrast to Ethereum ETFs, Bitcoin ETFs have maintained positive net inflows of $16.897 billion since their launch. While there have been occasional outflows, Bitcoin ETFs have generally shown more resilience compared to their Ethereum counterparts.

ETH/USD Technical Analysis

As of the latest update, Ethereum is trading at $2,344, showing a 2% gain in 24 hours. The cryptocurrency is currently trading within a descending channel on the daily chart, with the Awesome Oscillator remaining negative, indicating bearish control.

However, ETH is attempting a breakout to the upside after forming three consecutive green candles. The Relative Strength Index (RSI) stands at 37, suggesting bearish territory, but a potential crossover above the signal line could indicate a buy signal.

Ethereum Price Outlook and Key Levels

Ethereum is currently attempting a recovery above the $2,320 level. Key points to watch include:

• Resistance levels: $2,375, $2,400, and $2,500
• Support levels: $2,320, $2,240, and $2,150

A breakthrough above $2,400 could pave the way for a move towards $2,500, while failure to maintain support at $2,320 might lead to further declines.