Ethereum Shows Signs of Recovery as Investor Interest Shifts from Bitcoin; ETF Inflows Surge Amid Market Optimism
Ethereum (ETH) is showing potential for a market bottom and recovery, with a growing shift in investor interest from Bitcoin (BTC) towards Ethereum. Technical analysis reveals ETH is hovering near its 50-week moving average—a critical level that has previously signaled bullish rallies when breached. While Ethereum continues to underperform against Bitcoin overall, recent trends indicate renewed buying interest. ETH is up 71% from its April year-to-date low, though still below its 2021 all-time high. Notably, US spot Ether ETFs have seen impressive momentum, recording a 19-day streak of net inflows totaling $1.37 billion, which accounts for roughly 35% of total inflows since their July 2024 launch. Despite these positive flows, market sentiment remains cautious with many investors still affected by ’bear market PTSD.’ Analysts stress that a sustained Ethereum rally above key resistance levels is essential to stimulate an altcoin season, as altcoins remain laggards compared to Bitcoin. Derivatives markets have seen seller exhaustion and major ETH short liquidations, prompting a potential stabilization as leverage ratios decrease and confidence swiftly returns post-volatility. The ETH/BTC ratio, though still weak, has shown minor recent improvement, suggesting market participants are watching for signs of further ETH strength. Overall, cautious optimism prevails with traders advised to monitor resistance levels, ETF inflows, derivatives activity, and macroeconomic factors for decisive trend shifts.
Bullish
Ethereum’s recent performance, including technical stabilization near its 50-week moving average and a 71% rebound from April lows, suggests it may have formed a price bottom. The significant and sustained inflows into US spot Ether ETFs—totaling $1.37 billion and accounting for 35% of all inflows since July 2024—reflect growing institutional and retail interest. Seller exhaustion indicators, leveraged short liquidations, and a strengthening ETH/BTC ratio point to declining selling pressure and recovering trader confidence. Although overall market sentiment remains cautiously optimistic due to lingering post-bear market concerns, these positive technical, fundamental, and sentiment indicators suggest that ETH is positioned for further gains in both the short- and medium-term, especially if it can sustain rallies above key resistance levels. If this momentum continues, it could also trigger a broader altcoin season, further supporting the bullish view.