Ethereum's expected July rise threatened by outflows and whale exchange deposit

Ethereum (ETH) is up more than 2% on Monday despite increased outflows across global ETH ETF products and exchange deposits from key whale wallets.

Daily digest market movers: Ethereum outflows, whale transfers

In an X post on Monday, Nate Geraci, President of the ETF Store, predicted that spot Ethereum ETFs would be the second most successful ETF debut in history behind spot Bitcoin ETFs.

However, flows across international Ethereum investment products suggest otherwise. According to CoinShares, global Ethereum ETFs saw outflows of $61 million last week, its highest since August 2022. This pushes its two-week net flows to $119 million in outflows.

CoinShares noted that the move places ETH as the worst-performing digital asset this year in terms of net flows. ETH net flows could turn positive in the coming weeks if the Securities & Exchange Commission (SEC) approves the S-1 drafts of issuers in the US.

The SEC approved 19b-4 filings of prospective spot ETH ETF issuers on May 23 but also needs to greenlight their S-1 registration statements before the ETFs can begin trading.

According to Wu Blockchain, an ICO-era whale moved 7K ETH worth $24.8 million to Kraken exchange within the past 24 hours after staying silent for 209 days. The whale wallet still has more than 40K ETH, worth about $139.5 million, within its possession. Notably, the whale purchased 254.9K ETH at an average price of $0.311 during its ICO in 2014.

Historically, long-term holders becoming active often indicates that the market is approaching the peak of a bull cycle.

Additionally, an address linked to the US government transferred 3,375 ETH to an unknown address, according to Arkham Intelligence. The address contains the seized funds of Estonia duo Potapenko and Turogin, who were extradited to the US for an alleged $575 million Ponzi scheme.

ETH technical analysis: Ethereum's historical July returns may attract bulls

Ethereum is trading around $3,469, up over 2% in the past 24 hours, as the crypto market looks set for a recovery. The price increase wiped more than $20 million worth of ETH short positions off the market, while long positions only saw minor liquidations of about $4 million.

Ethereum's positive start to the month aligns with its average July returns since its launch. Coinglass data shows Ethereum has an average return of 6.28% in the month. In the past four years, the number one altcoin has only ended July on a loss in 2023.

ETH/USDT 4-hour chart

In addition, Ethereum looks poised for growth as spot ETH ETFs may launch in the coming days. As a result, ETH could test the $3,629 resistance, which it had failed to sustain a move above in the past three weeks. A breach of the $3,203 key support would invalidate the bullish thesis.