Ethereum Price Forecast: ETH overcomes key hurdle as ETF and staking inflows improve

Ethereum price today: $3,820

• Ethereum ETFs have averaged $100M in net inflows per day in the past eight days amid signs of increased basis trade.
• Increased staking inflows suggest a bias toward long-term holding among investors.
• Ethereum overcame a key trendline resistance that has lasted for the past three years.

Ethereum (ETH) is down 1% on Thursday despite rallying in the European session to overcome a key descending trendline resistance that has lasted for three years. The top altcoin has seen increased bullish sentiment across staking protocols and ETH ETFs. However, Chicago Mercantile Exchange (CME) data reveals that the ETH basis trade may have fueled the high ETF inflows.

Ethereum ETF flows suggest high basis trade, staking inflows improve

Ethereum ETFs stretched their inflows streak to eight consecutive days after recording net inflows of $167.7 million on Wednesday. In the past eight days, the products have averaged about $100 million inflows per day. This signals that institutional investors are gradually getting bullish on the top altcoin.

On the other hand, some crypto community members suggest that the high inflows into ETH ETFs could be due to increased basis trade among institutional investors. This is evidenced by the large number of short positions dominating the ETH CME futures market despite high bullish sentiment in the global ETH spot market.

CME Open Interest ETH Futures (Short) | The Block

The basis trade process involves investors going long on ETH by owning shares of Ethereum ETFs and simultaneously holding equivalent short positions in the futures market. The aim is to earn yields from the funding fees that short positions receive during bull markets.

Meanwhile, Ethereum has been seeing high net inflows across staking protocols after they recorded over 113K ETH net inflows in the past two days. The rising staking flows indicate a bias toward long-term holding even as ETH maintains its uptrend.

ETH Staking Flows | IntotheBlock

Ethereum Price Forecast: ETH overcomes three-year descending trendline resistance

Ethereum decreased by 1% after experiencing over $76 million in liquidations within the past 24 hours, according to Coinglass data. The liquidated long positions totaled $46.58 million, while short positions amounted to $29.91 million.

The top altcoin broke above a key descending trendline resistance extending from its all-time high in November 2021. If ETH sustains a daily candlestick close above this trendline, it could break its yearly high resistance of $4,093.

ETH/USDT daily chart

A move above its yearly high resistance may see ETH test its all-time high resistance of $4,898 to reach the profit target of a rounded bottom pattern.

The Relative Strength Index (RSI) is in the overbought region, indicating prices are getting overheated and could see a correction.

A daily candlestick close below the $3,400 support level will invalidate the thesis and send ETH toward the $2,817 key level.