Ethereum Price Forecast: ETH declines despite increased ETF inflows and rising optimism from traders

Ethereum price today: $2,510

• Ethereum ETFs are on track to record eight consecutive weeks of net inflows after pulling in $148.5 million on Thursday.
• Positive regulatory developments affecting Ethereum have seen traders anticipate a price jump above $3,000.
• However, ETH could drop to $1,750 as it inches closer to validating a death cross signal.

Ethereum (ETH) declined 3% on Friday despite US spot ETH exchange-traded funds (ETFs) nearing eight straight weeks of inflows worth nearly $2 billion. The strong inflows follow increased Ethereum treasury allocations in public companies and progress in stablecoin legislation in the US.

Ethereum ETFs maintain inflows as traders anticipate further price growth

US spot Ethereum ETFs are on track to stretch their positive streak to eight consecutive weeks after notching $148.57 million in net inflows on Thursday, their second-highest daily inflow since February, according to SoSoValue data. If net flows on Friday come out positive, the products could stretch their cumulative flows in these eight weeks above the $2 billion threshold.

Their strong inflows stem from positive developments surrounding the Ethereum ecosystem, including expansion in tokenization via Robinhood's first launch of tokenized US stocks on the Arbitrum Layer 2 (L2) network.

Additionally, more publicly listed companies are embracing Ethereum-focused treasury strategies, including SharpLink Gaming (SBET), which is the largest public holder of ETH. BitMine also recently shifted its approach from Bitcoin mining to prioritizing an Ethereum treasury path.

These developments come amid progress in US crypto legislation, as the House of Representatives plans to deliberate on the GENIUS stablecoin bill and crypto market structure bill during the upcoming Crypto Week, slated for the week of July 14. 

As a result, traders on crypto options exchange Derive hold a largely bullish stance toward the top altcoin, especially since nearly 50% of the stablecoin market runs on the Ethereum blockchain.

"Almost 80% of ETH call open interest for July expiry is concentrated above $3K. Incredibly, nearly 30% is on strikes above $3.5K. The market is clearly expecting a breakout," wrote Sean Dawson, Head of Research at Derive.

Despite the bullish positioning, the Federal Reserve's upcoming meeting in July, geopolitical developments, and the outcome of the House's vote on the CLARITY bill and GENIUS bill are key to watch in determining how the market may shape up in the month.

Ethereum Price Forecast: ETH sees rejection at key SMAs, risks 35% decline if death cross plays out

Ethereum experienced $56.82 million in futures liquidations, comprising $47.02 million in long liquidations and $9.80 million in short liquidations, over the past 24 hours, according to Coinglass data.

Following two months of consolidation, during which ETH has traded between $2,100 and $2,850, its Simple Moving Averages (SMAs) are hinting at a bearish signal on the weekly chart after resisting an upward move near $2,600. The 50-period SMA is on the verge of crossing below the 100-period SMA, signaling a potential death cross. This indicates that the short-term momentum is weaker than that of the long-term.

ETH/USDT weekly chart

ETH pulled a gain/loss of over 35% in the last two instances of such a crossover. As a result, a validation of the death cross could see ETH plunge to $1,750 if history repeats.

The Relative Strength Index (RSI) resumed a horizontal trend near its neutral level, while the Stochastic Oscillator (Stoch) pulled a similar move near its overbought region line. This indicates a largely neutral market momentum but with a modest bullish undertone.

A firm breakout above the upper boundary of a symmetrical triangle pattern could invalidate the thesis.