Ethereum Surges 2%, But ETFs See $20M Outflow – What’s Next for ETH?

Ethereum (ETH) has risen by 2%, now trading at $2,368 in the past 24 hours. However, Ethereum exchange-traded funds (ETFs) continue to struggle, seeing another day of outflows totaling $20.14 million.  With a history of weak third-quarter performance, 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 day of consecutive outflows. This outflow 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

Perhaps on the flip side, a positive sign for Ethereum comes from its funding rates, which are currently at low levels 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 shows 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 means 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, which is traditionally a strong time for price movements, all eyes are on Ethereum. With funding rates, key resistance levels, and market conditions lining up, a massive rally could be just around the corner.

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