Ethereum (ETH) has experienced a modest 2% rise, currently trading at $2,368 over the past 24 hours. However, Ethereum exchange-traded funds (ETFs) continue to face challenges, marked by another day of outflows totaling $20.14 million. Given Ethereum’s history of weak third-quarter performance, the question arises: could this signal trouble ahead for ETH, or is a breakout on the horizon?
Ethereum ETFs Face Massive Outflows
According to Lookonchain, a blockchain analysis platform, Ethereum ETFs saw net outflows of $20.14 million on September 12, marking the second consecutive day of outflows. This downturn was driven entirely by Grayscale’s ETHE, which saw a negative flow of the same amount. With this latest drop, the historical cumulative net outflow now stands at $582.9 million.
The weak performance of spot ETH ETFs has raised concerns among investors who had expected Ethereum to perform similarly to Bitcoin following the success of the spot BTC ETF. One possible reason for this underperformance could be the usual decline in risk assets during Q3. As a result, many analysts believe that a clearer evaluation of ETH ETF performance can only be made after Q3 passes.
Funding Rates Show Potential for Growth
On a more positive note, Ethereum’s funding rates are currently at low levels, ranging between 0.002 and 0.005. Historically, low funding rates have preceded major price rallies. If the rate climbs past 0.015, as seen in previous bull markets, Ethereum’s price could experience a sharp surge, potentially repeating its past rise from $1,500 to $4,000.
While volumes on Ethereum’s decentralized applications (DApps) have dropped by 18% in the past week, transactions on the network have actually increased by 13%. This indicates that while people are interacting less with DApps, overall trading activity remains strong.
Could Ethereum Hit $5,000?
Ethereum’s technical analysis shows encouraging signs as it hovers around $2,360, boasting a market cap of $284 billion. The coin has been consolidating within a broadening wedge pattern, with the RSI showing a bullish divergence. This suggests that Ethereum could soon test higher price levels, possibly reaching $3,500 or even $5,000 if it can break out of its current range.
As we head into the last quarter of the year, traditionally a strong period for price movements, all eyes are on Ethereum. With funding rates, key resistance levels, and market conditions aligning, a massive rally could be just around the corner.
