The second largest cryptocurrency in the world, Ethereum (ETH), went largely unnoticed by institutional players after its recent price rally. Last week, the ETH price spiked above $1,600 and ETH investment products saw significant institutional inflows.
In the last two weeks, institutional participation in Ethereum has been on the rise. ETH investment products saw net inflows for two consecutive weeks. According to CoinShares data, total Ethereum inflows last week were $8 million.
However, the previous week, total institutional inflows amounted to a staggering $120 million. Institutional involvement in Ethereum comes amid growing excitement surrounding The Merge update. As CoinShares reported:
Ethereum saw inflows totaling $8 million, while the previous week’s corrected data saw inflows totaling $120 million. These inflows mark the largest week of inflows since June 2021 and imply a turning point in sentiment after a recent 11-week run of outflows. It also suggests that as The Merge progresses to completion, investor confidence is slowly recovering.
The Ethereum community has been eagerly awaiting the update to The Merge and there have been multiple delays in the matter. However, Ethereum developers recently confirmed that The Merge update will happen in mid-September. This has served as a clear positive catalyst to the upside for Ether to rally last week.
ETH on-chain analysis and price action
Last Sunday, the price of ETH surged to over $1,600, pushing its weekly gains to over 40%. However, there has been a sharp pullback in the last 48 hours as the price of ETH has dropped below $1,450. The recent price pullback comes as ETH trading sentiment turns negative. As reported by on-chain data provider Santiment:
Ethereum had an up-and-down Sunday, jumping above $1,640 before dipping back down to $1,540. The trading crowd continues to disbelieve the hype and expect prices to fall ahead of the #FOMC meeting. $ETH should continue to be volatile.
Image courtesy of Santiment
ETH Chart by TradingView
Another big concern that Santiment reports is the supply of Ethereum (ETH) on exchanges. as reported the Santiment on-chain data provider:
“Since the end of April, the percentage of Ethereum coins found on exchanges has steadily increased. With prices so polarized after the big pullbacks in 2022, this is hardly surprising. However, it is a bit concerning that the price rally in July has not really done much to ease traders’ concerns and is keeping their coins in the places that make them easier to execute on future sell-offs.”