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Key Takeaways:
- Ethereum rose 4.09% over the weekend, breaking past the $3,860 resistance.
- On-chain metrics are mixed, with accumulation slowing but profits rising.
- Positive ETH ETF inflows signal strong institutional backing that may extend the rally.
Ethereum (ETH) recorded a 4.09% gain over the weekend, successfully defending the $3,700 support level and climbing past the $3,860 local high set on July 21. The move marks a technical breakout from a short-term trading range, though subdued volume and mixed on-chain signals suggest caution.
Ethereum Breaks Short-Term Range, Faces $4.1K Resistance
On the 4-hour ETH/USDT chart, Ethereum’s breakout above $3,860 signals a shift in short-term momentum. This level acted as a ceiling over the past week, and breaching it suggests bulls are regaining control. However, trading volume has remained relatively low, raising doubts about the strength of the rally.
Technical indicators offer a mixed outlook. While the MACD shows rising bullish momentum, the Chaikin Money Flow (CMF) reading sits at 0.0—indicating a lack of strong buying pressure from large investors. The next major resistance lies at $4,100, a critical level to watch for sustained upside.
On-Chain Metrics Hint at Overextension
According to data from Glassnode, Ethereum’s holder accumulation ratio has seen a slight decline in recent days and remains below the bullish 50% threshold. This metric reflects how many active holders are increasing their positions—a key signal for market conviction.
In parallel, 98.1% of ETH supply is currently in profit. Historically, ETH has seen local tops when this metric crosses 95%, as seen in March, June, and December 2024. This could indicate that the market may be due for a short-term pullback.
Positive ETF Flows and Institutional Interest Support Rally
Despite the cautious signals from on-chain data, institutional interest remains strong. July has seen 16 consecutive days of positive net inflows into ETH spot ETFs, with a notable $452 million flowing in on July 25 alone, according to Farside data.
Also Read: Ethereum Price Surges Past $3,900 as Sharplink Buys $295M in ETH, Eyes $4,284 Breakout
This sustained influx of capital suggests growing investor confidence, especially as Ethereum gains traction among public treasury companies and listed firms. The 2020–2021 bull cycle showed that ETH could maintain high profit supply levels for extended periods, hinting that the current trend could still have legs.
While the high percentage of supply in profit and slight dip in accumulation ratio suggest a potential cooling period, Ethereum’s rally appears fundamentally supported by strong institutional demand and positive ETF flows.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
