"Ethereum Sees $740M Inflows Amid Volatility; Bullish Divergence Emerges"

Ethereum Sees $740 Million Inflows This Week as Investors Buy the Dip

Ethereum (ETH) has experienced a significant increase in investment this week, with over $740 million in inflows, according to data from CoinShares. This surge in investment comes as the cryptocurrency market faces heightened volatility and significant liquidations, with ETH remaining under bearish pressure.

However, a bullish divergence has emerged on Ethereum's daily chart, suggesting that the coin might be poised for a rebound and a possible rally back above $3,000. This divergence is supported by an upward trend in the Chaikin Money Flow (CMF) indicator, which measures the strength of buying and selling pressure by analyzing price and volume over a specific period.

At press time, ETH's CMF rests above the zero line at 0.14, indicating that buying pressure is increasing despite the downtrend. This divergence suggests that ETH traders are accumulating the asset at lower prices, potentially signaling a reversal. A sustained increase in the ETH's CMF hints at a price rebound as demand outweighs selling pressure.

Moreover, after several days of negative values, ETH's funding rate has turned positive again. The shift in market sentiment suggests that futures traders are increasingly favoring long positions, indicating renewed confidence in ETH's price recovery. At press time, this stands at 0.0046%.

Ethereum's price decline has caused it to trade within a descending channel over the past few weeks. This pattern is formed when an asset's price moves within a downward-sloping range, creating lower highs and lower lows over time. It typically signals a bearish trend, but a breakout above the channel could indicate a potential reversal. If the demand for ETH soars, a potential breakout could propel the coin's price to $3,249.

On the other hand, a failed breakout attempt could cause a price decline toward the channel's support at $2,553. As the market continues to evolve, investors will be closely watching Ethereum's price action to determine the next move in the cryptocurrency's trajectory.