As the crypto market recovers from the recent shock, Ethereum (ETH) and investment products based on the King of Altcoins recorded a remarkable one-day performance, which is likely to set the stage for further recovery.
Ethereum ETFs Are Recovering Against the Background of the Market
Ethereum-based spot exchange-traded funds (ETFs) rebounded from Tuesday’s weak performance and recorded their best one-day session in nearly two months, with $169 million inflows on Wednesday.
According to data from SoSoValue, the category attracted the network’s highest stream since January 14 after $175 million. It is worth noting that the crypto market correction in mid-January led to a large outflow of investment products, with funds based on the two largest crypto assets, Bitcoin (BTC) and ETH, showing the weakest performance.
Ethereum ETFs saw a negative five-week period, bleeding $1.38 billion during that period. However, funds ended their weekly outflow last week after inflows of $80.46 million.
So far, the product has collected $197.35 million this week, possibly setting the stage for its best weekly performance since January 16, when it closed the week with $479.04 million.
Alex Kupsikiewicz, chief market specialist at FxPro, recently emphasized that the strength of crypto ETFs, despite the rise in geopolitical tensions and the collapse of financial markets, can be seen as a “victory for cryptocurrencies” as some traders may consider digital assets as a safe haven.
Meanwhile, James Butterfill, head of research at CoinShares, emphasized that “recent client discussions have focused almost entirely on identifying entry points rather than reducing exposure to the asset class.”
ETH at a structural decision point
The price of Ethereum rose 12% on Wednesday, its highest level since February 4. Amid the market recovery, the cryptocurrency regained the $2,100 barrier and reached $2,199 before returning to the one-month high.
The king of altcoins has been trading between $1,825 and $2,150 since early February, failing to break the upper boundary of its local range.
Analyst Rekt Capital noted that ETH closed the month just below an important multi-year uptrend that has served as a macro support and pivot point for years.
This puts the price in a structurally low position as it allows for a monthly test of this level as resistance instead of support. The analyst emphasized that if this trend turns into resistance, it will confirm the breakdown of the macro structure and increase the probability of a deeper move into the key horizontal zone and the historical demand cluster, which is located around the $1,600 zone.
“If Ethereum rejects the trendline and the current bounce is fully reversed, this rejection indicates that the trendline is disintegrating as support and confirms the breakout scenario,” he said.
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However, he noted that the continuation of the decline has not yet been confirmed, explaining that if ETH recovers the trend line as support in the monthly timeframe, the horizontal zone and the historical supply zone around the $2,250-$2,500 levels may act as a relief cluster, “where the price may increase before further market movement.”
“Currently, Ethereum remains at a structural decision point around a multi-year trend,” he said.
Featured image from Unsplash.com, Chart from TradingView.com
