Ethereum Surges Past $3400 Amid Record Inflows into ETFs

The second most valuable cryptocurrency has seen an 8.9% increase in price over the past day, reaching $3,452—its highest level since mid-January, according to CoinGecko. This rally has been bolstered by a record influx of capital into spot Ethereum-ETFs.

According to SoSoValue, on July 16, the net inflow into nine exchange-traded funds amounted to $726.74 million, with the standout being BlackRock’s ETHA, which attracted $499 million.

Since the beginning of July, spot ETH ETFs have drawn in $2.27 billion, setting a monthly record since their launch.

BTC Markets analyst Rachel Lucas believes that Ethereum is increasingly seen as a long-term institutional asset rather than a speculative tool. She noted that funds currently hold 4% of the total market cap of the altcoin, indicating a rapid influx of capital from major investors.

Nik Rak, the director of research at LVRG Research, has linked Ethereum’s dynamics to the increasing number of public companies investing in cryptocurrency as a reserve asset.

SharpLink Gaming, backed by ConsenSys, has become the largest holder of the coin with approximately 280,600 ETH, surpassing the Ethereum Foundation.

Alongside Ethereum’s surge, other altcoins also appreciated: XRP increased by 7.8%, Solana by 5.7%, and BNB by 4.2%, as per CoinGecko. Bitcoin rose 0.2% during the same timeframe.

The dominance index of the leading cryptocurrency fell by 2.59% over the week, to 62.62%, according to TradingView. Lucas stated that this decline in the metric has historically been a precursor to an «altcoin season.»

Ethereum’s price increase resulted in the forced liquidation of short positions worth $177.67 million, according to Coinglass. These liquidations made up the majority of the total liquidation volume of $227.74 million over the last day.

Conversely, short sellers of Bitcoin faced losses of just $45.33 million during the same period.

The daily trading volume for the altcoin increased by 28% to $161 billion, surpassing the volume of Bitcoin ($109 billion). The open interest in Ethereum derivatives rose by 7%.

Patrick Grun, the founder of Perpetuals.com, suggests that the price of the second largest cryptocurrency responds sharply to news regarding regulations in the U.S. This intensifies uncertainty and heightens the asset’s volatility. He remarked that the situation with Bitcoin was more predictable.

Analysts from Glassnode noted that Ethereum is the only asset in the top 10 (other than stablecoins) showing an increasing daily trading volume in futures. The figure has gone up by 27%.

The funding rate remains neutral, indicating the emergence of new positions without signs of excessive leverage utilization, experts concluded.

Greg Magadini, the director of derivatives at Amberdata, added that from April to June, the rate was negative, indicating a dominance of short positions in the market.

In light of these developments, BitMEX founder Arthur Hayes declared the start of the «ETH season.»

He announced that his venture fund, Maelstrom, plans to invest in tokens from «best-in-class» DeFi projects.

To recall, on July 11, Ethereum’s prices surpassed the $3,000 mark for the first time since February, as record inflows into the BlackRock ETF were recorded.