Record Ethereum Inflows Signal Market Optimism for Upcoming ETF Approval

• Ethereum’s Netflow remained positive with a substantial amount of ETH continuing to enter exchanges more than exiting.
• Speculation grows as institutional investors prepare for potential Ethereum ETF approval, mirroring pre-Bitcoin ETF activity patterns.

Ethereum recently witnessed a substantial influx of funds, totaling $2.3 billion, reflecting significant market activity as expectations grew for the approval of an Ethereum-based exchange-traded fund (ETF).

On May 21st, approximately 627,770 ETH entered exchanges, priced at about $3,789 each, resulting in the second-largest daily inflow in more than a year. This followed another major influx in March when 648,000 ETH, also valued at roughly $2.3 billion, were transferred to exchanges. By the time of reporting, daily inflows had exceeded 100,000 ETH.

The data indicates that Ethereum’s Netflow was positive for several consecutive days, showing that more ETH was moving into exchanges than leaving. Specifically, the Netflow on May 21st was about 49,000 ETH, with an additional 5,600 ETH observed soon after.

Concurrently, there was a rise in the liquidation of short positions in Ethereum. On May 20th, approximately 20,558 units of ETH, valued at more than $75.2 million, experienced liquidation. 

This continued on May 21st, with further liquidations amounting to approximately 11,600 ETH, valued around $44 million. Amid these financial movements, speculation intensifies that institutional investors are preparing for the potential approval of an Ethereum ETF. 

Data from CryptoQuant indicates significant ETH outflows from Coinbase on the dates of March 11th, March 27th, and April 18th, with outflow volumes measuring around -134,000, -120,454, and –133,000 ETH, respectively.

These trends resemble the ones seen before the approval of the Bitcoin ETF in January, indicating that institutions may be preparing in advance for a potential positive regulatory outcome for Ethereum.

This activity underscores the potential impact that an Ethereum ETF approval could have on the cryptocurrency market, providing a structured and regulated investment avenue for Ethereum, analogous to the shifts seen with Bitcoin’s ETF introduction.

Ethereum (ETH) is currently at $3,835.75 USD, up 2.54% recently. Based on technical analysis and market trends, bullish behavior is expected, especially if an Ethereum ETF is approved, which could trigger a 60% rally. Experts highlight that the approval of this ETF could significantly increase ETH buying.