Ethereum Price Forecast: ETH faces staking withdrawal headwind amid sustained ETF inflows
- Ethereum ETFs' sustained inflows indicate high bullish sentiment among institutional investors.
- Ethereum staking outflows suggest increased profit-taking among investors.
- ETH could rally to test its all-time high resistance of $4,868 after reaching a nine-month high.
Ethereum (ETH) is up 2% on Monday, surging above a key symmetry triangle following sustained institutional interest via ETH exchange-traded funds (ETFs) investors. However, rising withdrawals across staking protocols could halt the bullish momentum.
Ethereum bullish momentum fueled by ETF inflows amid rising staking outflows
US spot Ethereum ETFs posted record net inflows of $818.8 million last week after extending its inflow streak to 15 days of positive flows, per Coinglass data.
The flows were dominated by inflows of $523.1 million and $258.6 million into BlackRock's ETHA and Fidelity's FETH, respectively. The sustained inflows have boosted their cumulative flows to $3.2 billion and $1.38 billion.
Notably, on Friday, Grayscale's ETHE flipped to positive flows for the first time since launch, recording net inflows of $7.2 million. This could mark a major turning point for Ethereum ETFs, which now have a total net inflows of $2.27 billion.
Despite the sustained bullish sentiment among institutional investors via ETH ETFs, Ethereum exchange reserves have been trending upward over the past four days. The reserves increased by nearly 100K ETH, worth about $400 million, indicating that Ethereum could see selling pressure after the recent price rise.
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Ethereum Exchange Reserve | CryptoQuant
Additionally, the total amount of staked ETH has declined by over 490K ETH in the past month due to increased outflows across staking protocols. Such outflows indicate that investors are either gradually taking profits due to the recent price increase or losing interest in holding onto ETH in the long term.
Ethereum Staking Flows | IntotheBlock
This is evidenced by the recent activity surrounding Tron founder Justin Sun's Ethereum address. According to the crypto analytics platform Spot On Chain, Sun's address applied to withdraw 52,905 ETH from the staking protocol Lido Finance.
Justin Sun (@justinsuntron) applied to withdraw 52,905 $ETH (now $209M) from #LidoFinance an hour ago.
— Spot On Chain (@spotonchain) December 16, 2024
This is part of the net 392,474 $ETH he allegedly bought at ~$3,027 ($1.19B) via 3 wallets from Feb-Aug, now having an est. total profit of $349M (+29%).
Note that on Oct 4,… https://t.co/r5z7l8YSUq pic.twitter.com/GAalq1imjO
Ethereum Price Forecast: ETH could rally to test its all-time high resistance after reaching a nine-month high
Ethereum is up 2% after sustaining $90.44 million in liquidations in the past 24 hours, per Coinglass data. Liquidated long and short positions accounted for $31.25 million and $59.19 million respectively.
ETH tested its yearly high resistance of $4,093 for the first time in nine months after moving above the upper boundary of a symmetry triangle.
ETH/USDT daily chart
If ETH manages to overcome its yearly high of $4,093 with a high volume move and establish the triangle's upper boundary as a key support level, it can surge to test its all-time high resistance at $4,868.
The Relative Strength Index (RSI) is above its neutral level and trending upward, indicating rising bullish momentum. Meanwhile, the Stochastic Oscillator is in the overbought region, indicating ETH may be due for a correction.
A daily candlestick close below $3,550 will invalidate the thesis.
Ethereum FAQs
Ethereum is a decentralized open-source blockchain with smart contracts functionality. Its native currency Ether (ETH), is the second-largest cryptocurrency and number one altcoin by market capitalization. The Ethereum network is tailored for building crypto solutions like decentralized finance (DeFi), GameFi, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), etc.
Ethereum is a public decentralized blockchain technology, where developers can build and deploy applications that function without the need for a central authority. To make this easier, the network leverages the Solidity programming language and Ethereum virtual machine which helps developers create and launch applications with smart contract functionality.
Smart contracts are publicly verifiable codes that automates agreements between two or more parties. Basically, these codes self-execute encoded actions when predetermined conditions are met.
Staking is a process of earning yield on your idle crypto assets by locking them in a crypto protocol for a specified duration as a means of contributing to its security. Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus mechanism on September 15, 2022, in an event christened “The Merge.” The Merge was a key part of Ethereum's roadmap to achieve high-level scalability, decentralization and security while remaining sustainable. Unlike PoW, which requires the use of expensive hardware, PoS reduces the barrier of entry for validators by leveraging the use of crypto tokens as the core foundation of its consensus process.
Gas is the unit for measuring transaction fees that users pay for conducting transactions on Ethereum. During periods of network congestion, gas can be extremely high, causing validators to prioritize transactions based on their fees.
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