• Ethereum is showing signs of recovery on Tuesday in the US market following a modest increase in the Coinbase Premium Index and inflows into ETH ETFs.
• The modest increase in US sentiment coincides with rate-cut expectations rising to over 80%.
• ETH is struggling to find direction after reclaiming the $2,850 support.

Ethereum has been seeing a gradual recovery in US market sentiment in the past few days.

The Coinbase Premium Index, which is a proxy for measuring US investors’ interest, rose from -0.12 last Thursday to -0.02 on Monday, according to CryptoQuant data. Although the metric remains negative, the modest rise shows that these investors are pricing ETH higher than they were a week ago.

Institutional interest in the US is also returning, as evidenced by inflows into US spot Ethereum exchange-traded funds (ETFs), according to SoSoValue data. The products recorded $96.67 million in net inflows on Monday, marking two consecutive days of positive flows after an eight-day streak of outflows.

The recovery sentiment is also noticeable among whale investors holding 10K-100K ETH — especially after ETH’s price plunged below their average cost basis. In an attempt to potentially push prices back above their average cost, these wallets resumed accumulation, growing their collective holdings by about 440K ETH over the past week.

In contrast, wallets holding 1K-10K and 100-1K ETH accelerated distribution as prices approached their cost basis. These cohorts distributed 100K ETH and 120K ETH, respectively, during the same period.

Meanwhile, ETH futures maintained a cautious undertone, with net outflows of $4.31 billion over the past seven days, according to Coinglass data. However, interest has increased slightly this week, with inflows of $735.46 million over the past three days.

The modest return in US interest rates coincides with a jump in rate-cut expectations toward the end of last week. The odds of the Federal Reserve (Fed) reducing interest rates in its upcoming December meeting have risen from around 30% last Thursday to over 80% on Tuesday, per the CME FedWatch tool.

However, it remains unclear if ETH has found a bottom with uncertainty lingering in the macro environment. Several market experts predict that macro conditions have to improve for cryptocurrencies to stage a major recovery.

Ethereum saw $80.8 million in futures liquidations over the past 24 hours, spearheaded by $51.3 million in short liquidations, according to Coinglass data.

ETH is struggling to find direction near the $3,000 psychological level after reclaiming the $2,850 support. The top altcoin could rise to test the descending channel’s upper boundary if it overcomes the resistance near $3,100, which is just below the 20-day Exponential Moving Average (EMA).

On the downside, ETH could find support at the channel’s lower boundary if it loses the $2,850 key level.

The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are trending upward but remain below their neutral levels, indicating a mild decline in the dominant bearish momentum.