Crypto investments recorded another week of positive flows last week, bringing the month’s inflows to $3.2 billion. ETFs remain a key in drawing capital into the market.
The crypto market is prevailingly bullish, with multiple catalysts lined up for the week. This increases the odds of more capital flowing in this week.
Crypto Investments Hit $3.2 Billion in Three Weeks
The third week of July saw up to $1.35 billion in inflows, bringing crypto investments to $3.2 billion this month. It came amid soaring Bitcoin (BTC) purchases, reaching $1.27 billion. Conversely, short-Bitcoin ETPs (exchange-traded products) recorded more outflows of up to $1.9 million, CoinShares reports, citing Bloomberg data.
Ethereum also recorded positive flows, reaching $45.3 million, effectively beating Solana on metrics of altcoins with most inflows year-to-date.
The interest in Ether is unsurprising. It comes ahead of July 23, when five Spot Ethereum ETFs will start to trade on the Chicago Board Options Exchange (Cboe). These include the Fidelity Ethereum Fund, Franklin Ethereum ETF, Invesco Galaxy Ethereum ETF, VanEck Ethereum ETF, and 21Shares Core Ethereum ETF.
“Similar to the BTC Spot ETFs launch, issuers of ETH Spot ETFs are competing to offer the lowest possible management fees to attract early inflows. Management fees range from 0.15% to 0.25%. This fee competition is crucial as early inflows can secure high assets under management for 1-3 years, given the long-term investment horizons of many ETF investors. Overall, market participants expect strong interest in ETH Spot ETFs and significant inflows in the first 3-6 months post-launch. It will be crucial to compare net inflows to those of BTC, considering the different market capitalisations, to gauge the appetite of traditional finance investors for digital assets beyond Bitcoin,” Matteo Greco, Research Analyst at Fineqia, told BeInCrypto.
Read more: Ethereum ETF Explained: What It Is and How It Works
The launch will enable hedge funds and pensioners to buy Ethereum more easily. According to The ETF Store president Nate Geraci, ETF issuers are lining up to file for combined spot BTC, ETH, and Solana (SOL) ETF in the next few months, bringing forth an index-based ETF.
Besides the ETF hype, markets are also bracing for the Bitcoin 2024 Conference, which will start on July 25. Together with the ETH ETF news, crypto inflows could be higher this week than last.
ETH Options Open Interest Surge With Ethereum ETFs on the Horizon
Ahead of the ETH ETFs launch, the Bitcoin and Ethereum options exchange Deribit showed a surge in open interest in ETH options. Based on data from Deribit, Ethereum options implied volatility has been up 26% since last week. This suggests increased market interest and activity, anticipating increased Ethereum price fluctuations.
Ethereum’s price has resorted back to its consolidation zone between $3,352 and $3,642 on the daily timeframe. The volume nodes show massive activity between ETH bulls (purple) and bears (orange), with node spikes within this range.
With the Relative Strength Index (RSI) still above the mean level of 50, the Ether market remains bullish. The Moving Average Convergence Divergence (MACD) above the signal line (orange band) indicates that buying pressure exceeds seller momentum.
However, for Ethereum to confirm the continuation of the uptrend, the price must overcome resistance due to the supply wall between $3,760 and $3,866.
Read more: How to Invest in Ethereum ETFs?
Conversely, the RSI is inclined south, a sign of falling momentum. This, coupled with the fading MACD histograms, hints at dwindling bullish momentum and sentiment, with ETH at the cusp of further decline.
A break and close below the lower boundary of the consolidation range at $3,352 could trigger panic selling. Nevertheless, the bullish thesis for ETH would only be invalidated upon a break and close below the demand zone under $2,924.
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