Key Takeaways

What are the current market conditions like for Ethereum?

There is short-term selling pressure, but it might be reflective of a consolidation rather than a distribution market phase.

Will the inflows to exchanges drag ETH much lower?

This is possible. The $3.8k-zone has been a significant horizontal level since July. If breached, $3.4k would be the next target.

Legacy asset manager T.Rowe Price’s new actively managed multi-coin exchange-traded fund (ETF) would likely include Ethereum [ETH] as one of the digital assets held. Fund managers are yet to decide which assets to include and how they will be weighted.

This development is significant. However, unlikely to impact crypto prices in the short term. In fact, the sentiment around Ethereum has been muted over the past two weeks following the mass liquidation event on 10 October.

Source: Coinalyze

Derivatives data showed that Open Interest has stayed around the $19 billion – $20 billion mark. Before the liquidation event, OI figures had been around $27 billion. This represented a relatively deleveraged market – A sign of bearishness.

The funding rate was only barely positive, but it did briefly dip into negative territory over the past two weeks.

Ethereum selling uptick could see hike in volatility

Source: CryptoQuant

In a post on CryptoQuant Insights, analyst CryptoOnchain demonstrated that the 7-day moving average of the exchange netflows changed bearishly. On 15 October, this figure had been -31k ETH, underlining heavy outflows and accumulation.

At press time, it was over +3k. This swing towards inflows highlighted selling pressure, even as ETH’s price declined. Until this changes, traders should be wary of a further downward price swing.

Source: CryptoQuant

Another analyst, TeddyVision, observed that Ethereum was still trading above the fundamental support level – The realized price at $2.3k. Dips below this level highlight capitulation and bear markets. Finally, the MVRV was at 1.67, meaning holders were on average 67% in profits.

The price approached the realized price upper band, but was unable to test it. This might be normal.

Overall, at the time of writing, holders were at a profit but not overheated, and the market was not euphoric. This may be good for bulls in the medium term. Especially as more gains could follow this consolidation phase.