Ethereum Continues to Attract Investment Despite Lackluster Performance as ETF Flows Rise

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U.S. spot Ethereum ETFs recorded a net inflow of $130 million on Jan. 13, led by BlackRock's iShares Ethereum Trust according to CoinPaper. This marked one of the largest single-day inflows this month and signaled renewed institutional demand for ETH. The inflows came after a period of mixed activity in late December and early January, when redemptions had pressured ETF balances as reported.

Ethereum's price also showed signs of momentum, breaking above a symmetrical triangle on the daily chart near $3,330. The breakout suggests a potential move toward $4,000, a level previously tested during earlier market cycles. This move was supported by volume confirmation and a lack of short-lived spikes.

Morgan Stanley recently announced plans to enter the Ethereum ETF space with products offering staking rewards. This move aligns with Ethereum's technical upgrades, including Dencun in 2024 and Pectra in 2025, which have improved scalability and reduced transaction costs.

Why Did This Happen?

The rise in Ethereum ETF inflows is driven by growing institutional interest in crypto assets. BlackRock's $53.3 million net inflow into its Ethereum Trust accounted for the largest portion of the Jan. 13 flows. Other firms, including Fidelity and Bitwise, also reported positive inflows, indicating broad-based accumulation.

In parallel, Ethereum's price action has shown signs of consolidation breaking. The coin moved above a key trendline resistance after weeks of sideways trading, confirming a bullish bias on daily charts. This move followed a period of accumulation that ended in late December, when Ethereum ETFs experienced net outflows.

What Are Analysts Watching Next?

Analysts are closely monitoring Ethereum's ability to sustain a move above $3,300 and maintain support near $3,000 according to TradingView. The 100-day EMA at $3,288 is currently a key support level. A sustained close above $3,339 could signal a stronger bullish phase.

Derivatives data also suggests a growing long bias among traders. Long/short ratios on Binance are skewed heavily in favor of longs. However, volume has collapsed, signaling a wait-and-see attitude among traders.

Ethereum's ability to hold above key psychological levels, like $3,100, remains critical for bullish momentum. A retest of the $3,000 support zone could trigger a larger correction, especially if macroeconomic pressures or geopolitical tensions intensify.

Network upgrades, including the upcoming Glamsterdam and Hegota updates, are also being monitored as potential catalysts for Ethereum's price. These upgrades aim to improve scalability and transaction efficiency.

What Do Market Conditions Signal?

The broader cryptocurrency market is showing resilience amid improving macroeconomic conditions. Bitcoin rose to over $95,000 on Jan. 14, driven by positive sentiment from U.S. inflation data. Ethereum followed a similar trend, rising toward $3,160 and holding above $3,000 despite retail distribution.

ETF inflows have provided a tailwind for both Bitcoin and Ethereum. The cumulative inflow into Ethereum ETFs now stands at $12.57 billion, with net assets at $19.62 billion. BlackRock's ETHA ETF led the inflows with $53 million, followed by Grayscale's ETH with $35 million.

Market participants remain cautious, however, as volatility remains a challenge. The S&P 500 and Nasdaq Composite edged lower on the day, despite the positive crypto flows. This suggests that risk appetite is still uneven across asset classes.

What Is the Outlook for Ethereum?

The immediate focus for Ethereum is on confirming the breakout above $3,300 with volume and maintaining control of key psychological levels. A sustained close above this level would increase the likelihood of a move toward $3,500–$3,600 according to analysis.

Conversely, a breakdown below $3,000 could trigger a deeper correction toward $2,900–$2,800. This scenario would increase the likelihood of risk-off behavior across crypto markets, especially if macroeconomic conditions deteriorate.

Analysts also note that Ethereum's fundamentals remain strong. Tokenized real-world assets on the Ethereum network have grown to $12.5 billion. This suggests that demand for Ethereum-based infrastructure is still robust, even if price action lags behind.

Investors are advised to monitor key resistance and support levels, including the $3,150 and $3,080 zones according to Phemex. A sustained move above $3,200 would increase bullish conviction, while a failure to hold above $3,100 could trigger a retest of the $3,000 support zone.