Ethereum Momentum Strengthens Amid ETF Inflows and Staking Withdrawals

December 17, 2024 05:30 PM AEDT | By Team Kalkine Media

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Highlights

Ethereum (ETH) surges amid ETF inflows but faces rising staking withdrawals.

US spot Ethereum ETFs show continued positive inflows, hitting key milestones.

ETH eyes all-time high resistance after testing a yearly peak.

Ethereum (ETH) has shown strength with a surge, surpassing a key technical level as institutional interest remains strong. This positive trend is primarily fueled by the consistent inflows into Ethereum exchange-traded funds (ETFs), yet concerns arise due to significant staking withdrawals.

US spot Ethereum ETFs recorded substantial net inflows of $818.8 million last week, extending their positive streak to consecutive days. According to Coinglass data, major contributions came from BlackRock's ETH ETF (ETHA), which saw inflows of $523.1 million, and Fidelity’s ETF (FETH), attracting $258.6 million. These continued inflows have significantly boosted the overall cumulative flows to $3.2 billion and $1.38 billion, respectively.

Notably, Grayscale’s Ethereum ETF (ETHE) experienced a positive flow of $7.2 million on Friday, a turning point since its launch. This development highlights a growing institutional appetite for Ethereum-backed ETFs, with the total net inflows across ETFs now standing at $2.27 billion.

However, despite these optimistic inflows, Ethereum exchange reserves have increased by approximately 100,000 ETH, equivalent to about $400 million, over the past few days. This trend suggests the potential for mounting selling pressure after ETH’s recent price rally.

At the same time, a decline in the amount of staked ETH raises concerns. More than 490,000 ETH has been withdrawn from staking protocols in the past month. This indicates growing outflows as users may be taking profits or adjusting their holdings. Highlighting this sentiment, Tron founder Justin Sun recently applied to withdraw 52,905 ETH from the Lido Finance protocol, as reported by crypto analytics platform Spot On Chain.

From a technical standpoint, Ethereum surged to test its yearly high resistance at $4,093, marking its highest level in nine months. The price rally followed liquidations worth $90.44 million within 24 hours, with short and long positions accounting for $59.19 million and $31.25 million, respectively

If Ethereum manages to break past the $4,093 resistance with strong trading volumes, it could test its all-time high at $4,868. Technical indicators support this bullish outlook, as the Relative Strength Index (RSI) trends upward above neutral levels. However, the Stochastic Oscillator currently sits in the overbought zone, signaling a potential correction in the near term

Ethereum’s upward trajectory remains driven by ETF inflows, but the increase in staking withdrawals could create headwinds for its sustained growth.

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