Ethereum Drops 15% Despite $283 Million ETF Inflows

Ethereum's price has been fluctuating around $2,400 over the past few days, marking a 15% decrease from its peak this month. Despite this, Ethereum ETFs have seen a significant increase in inflows, with $283 million added last week, up from the previous week’s $40 million. This trend of inflows has been consistent for the past seven weeks, with June seeing the highest inflows at $1.13 billion, surpassing May’s $564 million and April’s $66.2 million. The cumulative inflows since September have exceeded $4.1 billion, bringing the total net assets to over $9.88 billion, with BlackRock’s ETHA holding $4.25 billion.

The surge in ETF inflows suggests that institutional investors are optimistic about Ethereum's price recovery in the near term. However, there are several risks that could impact Ethereum's value. On-chain data indicates that the supply of ETH on exchanges has increased to 7.44 million, up from this month’s low of 7.12 million. This rise in exchange balances signals that investors may be selling their tokens to take profits after the surge in May. Additionally, the supply held by whales has decreased to 100.48 million, down from the year-to-date high of 103.9 million, indicating that large investors may expect the price to fall.

Technical indicators also present challenges for Ethereum. The price has dropped below the 200-day Exponential Moving Average, a sign that bears have taken control. The last time this occurred was in February, leading to a subsequent crash of over 55%. Furthermore, Ethereum's price has invalidated the bullish flag pattern by moving below the lower side of the flag section, suggesting a potential continuation of the downward trend. This could result in the token dropping below $2,000 in the near future.

Despite the surge in ETF inflows, which indicates strong institutional interest, Ethereum's price faces significant risks. Rising exchange balances and decreasing whale holdings suggest potential selling pressure, which could lead to a decline in price. Additionally, the price has dropped below key technical indicators, further adding to the challenges. While the strong institutional trading demand makes a $3,000 price for Ethereum increasingly likely, according to the analyst's forecast, the actual price movement will depend on various factors, including overall market sentiment, regulatory developments, and the actions of large investors. Investors should closely monitor these developments and consider the potential risks before making any investment decisions.