Ethereum ETFs See Inflows as Whale Activity Rises: What’s Next?

After a prolonged period of outflows, Ethereum ETFs have recorded a turnaround, suggesting a potential shift in institutional interest. The week ending February 18 marked a significant moment with an inflow of $6.80 million, breaking a four-week streak of withdrawals. Meanwhile, large investors, known as whales, have resumed their accumulation of Ethereum amid this changing landscape.

However, this newfound optimism is challenged by the actions of long-term holders, who are continuing to sell their assets each time Ethereum’s price experiences a rise. This dual-sided activity creates a complex situation that could dictate the cryptocurrency’s future price movements.

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For four consecutive weeks leading up to mid-February, Ethereum faced ongoing selling pressures from institutions. The outflows were noted in the weeks ending January 23, January 30, February 6, and February 13, showcasing a period of diminished confidence among institutional investors and coinciding with a decline in Ethereum’s price.

The recent inflow might indicate a pause in this selling trend, albeit the figures are still modest and do not match the earlier outflow volume. Historically, a positive shift in ETF flows after a period of outflows can signify the beginning of stabilization.

In conjunction with the ETF activity, whale wallets have shown an increase in holdings, rising from 113.50 million ETH on February 15 to 113.63 million ETH recently. This accumulation represents an addition of approximately 130,000 ETH, valued at around $253 million, indicating that large investors are actively positioning themselves ahead of a potential recovery.

Nevertheless, the enthusiasm among these large holders faces opposition from long-term investors who seem to be cashing out during price rebounds. Data indicates that long-term holders sold 34,841 ETH over a rolling 30-day period as of February 17. This figure escalated to 38,877 ETH by February 18, revealing an increase in selling activity even as positive signals emerged from the market.

This selling behavior implies that long-term holders are using price spikes to exit their positions. Previous instances in early February show that such selling pressure has previously limited Ethereum’s ability to sustain upward momentum.

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Currently, Ethereum is trading within a symmetrical triangle pattern on its 8-hour chart, a formation that suggests a balance between buying and selling forces. On one side, institutional and whale interest is pushing for price recovery; on the other, long-term holders are limiting that progress.

The first critical resistance level for Ethereum stands at around $2,030, which previously obstructed its recovery. A successful breakout above this level could indicate a strengthening market momentum. Following that, the next notable resistance is at $2,100, which would need to be surpassed to confirm a more robust recovery trajectory.

Conversely, Ethereum holds downside risks, with a crucial reclaim level situated at $1,960. Should it fail to maintain above this threshold, a further decline could see prices dropping to $1,890 or even reaching down towards $1,740 if selling pressure increases.