- Ethereum ETFs record their longest outflow streak with five days of consecutive negative flows.
- Ethereum exchange net flow has increased to 31K ETH, its highest since the market crash on August 5.
- Vitalik Buterin says Ethereum is growing based on several key metrics.
- Ethereum technical indicators suggest a range-bound movement amid mixed sentiments from futures traders and fund investors.
Ethereum (ETH) is down 1% on Thursday as its ETF and exchange net flows suggest that sellers dominate the market. Despite the selling pressure, Ethereum co-founder Vitalik Buterin shared a post depicting its growth across several metrics.
Daily digest market movers: Ethereum ETF five-day outflow streak, positive exchange net flows, Vitalik’s metrics
Ethereum ETFs recorded its longest negative flows streak — five consecutive days — on Wednesday after posting outflows of $18 million.
The flows were spearheaded by outflows of $31.1 million in Grayscale’s ETHE, bringing its cumulative outflows since launch to over $2.5 billion. ETHA accompanied its milestone of over $1 billion in cumulative net inflows with zero flows on Wednesday.
With the consistent negative flows, Ethereum ETFs could record another week of net outflows as cumulative flows since Monday have amounted to $38 million in outflows.
A similar trend is occurring with ETH exchange flows. Unlike ETF flows, positive exchange net flows indicate selling pressure is rising and may lead to price declines.
Ethereum net exchange inflow increased to 31K ETH on Thursday, its highest since the market crash on August 5. The 7-day moving average exchange netflow has also been rising since August 11.
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ETH Exchange Net Flow
Meanwhile, Ethereum co-founder Vitalik Buterin shared an X post with several metrics suggesting that ETH has continued on its growth path. Some of the points he highlighted include the following:
- Increased staking decentralization.
- Improvement in cross-L2 wallet user experience (UX).
- More clarity on account abstraction roadmap.
- Mature zero-knowledge (ZK) tooling and many others.
“The fundamentals for Ethereum are actually crazy strong right now,” noted Buterin.
Ethereum has gotten stronger:
* Under $0.01 txfees on L2
* Two EVM L2s (@Optimism @arbitrum) now at stage 1
* Cross-L2 wallet UX has improved a lot (eg. no more manually switching networks), though still a long way to go
* Much more powerful and mature ZK tooling making life… pic.twitter.com/4jQGeZ3qEA— vitalik.eth (@VitalikButerin) August 22, 2024
ETH technical analysis: Ethereum could continue range-bound movement
Ethereum is trading around $2,610 on Thursday, down 1% on the day. In the past 24 hours, ETH has seen $31.34 million in liquidations, with long and short liquidations accounting for $24.1 million and $7.24 million, respectively.
Ethereum is consolidating on the 4-hour chart, where the 200-day Simple Moving Average (SMA) serves as support to prevent further price declines. Before prices could rally, ETH needs to overcome the $2,775 resistance which — coupled with the 50-day SMA — has prevented any upward attempt.
ETH/USDT 4-hour chart
The ETH Long/Short Ratio at 0.96 shows sellers dominate the market. Still, relatively strong buying pressure from Coinbase and Ethereum Funds investors, as evidenced by their premiums of 0.024 and 0.38, respectively, has kept prices on a horizontal trend.
ETH will likely remain range-bound with a bias toward the downside, as depicted by a key trendline extending from May 29 to September 27.
The Relative Strength Index (RSI) has moved below its midline at 48, indicating neutrality in momentum. The Awesome Oscillator (AO) also aligns with the neutral sentiment, posting short bars just shy above zero.
In the short term, ETH could rise to $2,666 to liquidate positions worth $65 million.
Ethereum development FAQs
After the Merge, the Ethereum community is looking at the Sharding upgrade next, which has been slated for sometime later in the year. The development can be summarized in four words, “scalability through more efficient data storage.” The software update will increase the capacity of the blockchain, widening the amount of data that can be stored or accessed. At the same time, all services running atop the Ethereum blockchain will enjoy significantly reduced transaction fees.
A fork is the splitting of a blockchain after developers agree and proceed to implement upgrades. The decision comes after these developers reach a consensus for a software upgrade. The ensuing part will see one part continue with the status as is, while the other one will proceed with new features combined with the former ones. A hard fork basically entails permanent divergence of a new side chain from the original one, while a soft fork is doing the same, only difference being that it is temporary.
EIP-4844 is an improvement proposal for the Ethereum network. The upgrade promises reduced gas fees, which is a valuable offering considering the high transaction cost that continues to daunt crypto players. It has been a long-standing concern for the Ethereum network. The proposal is also referred to as “proto-Danksharding,” with an unmatched ability to increase the speed of transactions on the Ethereum blockchain. At the same time, it helps to reduce the transaction cost as everything becomes decentralized.
Gas token is a new, innovative Ethereum contract where users can tokenize gas on the Ethereum network. This means they can store gas when it is cheap and start to deploy the gas once the market has shifted to the north. The use of Gas token helps to subsidize high gas prices on transactions, meaning investors can do everything from arbitraging decentralized exchanges to buying into initial coin offerings (ICOs) early.
