Ethereum price today: $3,820
With signs of increased basis trading, the Ethereum ETF has averaged $100 million in net inflows per day over the past eight days. The increase in staking inflows suggests that investors are biased toward long-term holdings. Ethereum has overcome major trendline resistance that has been present for the past three years.
Ethereum (ETH) fell 1% on Thursday despite rebounding in the European session to overcome the resistance of a key downtrend line that has lasted for three years. Top-tier altcoins have growing bullish sentiment across staking protocols and ETH ETFs. However, data from the Chicago Mercantile Exchange (CME) reveals that ETH basis trading may have driven large inflows into ETFs.
Ethereum ETF flows suggest high basis trading, staking inflows improve
The Ethereum ETF extended its streak of inflows to eight consecutive days after recording $167.7 million in net inflows on Wednesday. Over the past eight days, these products have averaged approximately $100 million in inflows per day. This shows that institutional investors are gradually becoming more bullish on top altcoins.
On the other hand, some members of the cryptocurrency community have suggested that the large inflows into the ETH ETF could be due to an increase in basis trading among institutional investors. This is evidenced by the large number of short positions dominating the ETH CME futures market, despite the bullish sentiment in the global ETH spot market.
CME Open Interest ETH Futures (Short) | The Block
The basis trading process involves an investor going long ETH by owning shares of an Ethereum ETF and simultaneously holding an equivalent short position in the futures market. The objective is to earn yield from the funding fees that short positions receive during bull markets.
Ethereum, on the other hand, is seeing high net inflows across staking protocols after recording over 113,000 ETH in the past two days. Despite ETH maintaining its upward trend, the increase in staking flow indicates a bias towards long-term holdings.
ETH Staking Flow | Into the Block
Ethereum Price Prediction: ETH Overcomes 3-Year Downtrend Line Resistance
Ethereum fell 1% after more than $76 million in liquidations occurred in the past 24 hours, according to data from Coinglass. Long positions liquidated totaled $46.58 million, while short positions totaled $29.91 million.
The top altcoin has broken above the resistance of a major downtrend line extending from its all-time high in November 2021. If ETH can maintain daily candlestick closes above this trend line, it could break through the yearly high resistance level at $4,093.
ETH/USDT daily chart
A move above the yearly high resistance line may force ETH to test the all-time high resistance level at $4,898 to reach the profit target of the round bottom pattern.
The Relative Strength Index (RSI) is in overbought territory, indicating that prices are overheating and a correction could be seen.
If the daily candlestick closes below the $3,400 support level, the theory will be invalidated and ETH will be sent towards the key level of $2,817.
Frequently asked questions about Ethereum
Ethereum is a decentralized open-source blockchain with smart contract capabilities. Its native currency, Ether (ETH), is the second largest cryptocurrency by market capitalization and number one among altcoins. The Ethereum network is tailored for building cryptographic solutions such as decentralized finance (DeFi), GameFi, non-fungible tokens (NFTs), and decentralized autonomous organizations (DAOs).
Ethereum is a public decentralized blockchain technology that allows developers to build and deploy functional applications without the need for a central authority. To facilitate this, the network leverages the Solidity programming language and the Ethereum virtual machine, allowing developers to create and launch applications with smart contract functionality.
A smart contract is a publicly verifiable piece of code that automates an agreement between two or more parties. Essentially, these codes self-execute the coded actions if a given condition is met.
Staking is the process of earning revenue from idle crypto assets by locking them in a cryptographic protocol for a specified period of time as a means of contributing to security. Ethereum transitioned from Proof of Work (PoW) to Proof of Stake (PoS) consensus mechanism on September 15, 2022 in an event dubbed “Merge”. This merger was an important part of Ethereum's roadmap to achieve high levels of scalability, decentralization, and security while maintaining sustainability. Unlike PoW, which requires the use of expensive hardware, PoS reduces the barrier to entry for validators by leveraging the use of cryptographic tokens as the core foundation of the consensus process.
Gas is a unit that measures the transaction fees users pay to conduct transactions on Ethereum. Gas can be very expensive when the network is congested, leading validators to prioritize transactions based on fees.
