Key takeaways:
$300 million outflows from US-listed Ethereum ETFs represent just 1.3% of assets under management.
Derivatives positioning and stable long-to-short ratios suggest strong $4,300 support despite leveraged long liquidations.
Ether (ETH) rallied 4.7% on Wednesday, pushing further from the $4,300 level after breaking its seven-day downtrend. Derivatives data suggest resilience despite notable outflows from US-listed spot Ethereum exchange-traded funds (ETFs), causing traders to question whether Ether can climb past $5,000 in the weeks ahead.
US-listed Ethereum spot ETFs recorded $300 million in net outflows over two sessions, reversing the prior six-day streak of inflows. While sizable, the withdrawals equal just 1.3% of total assets under management. Previously, strong ETF inflows alongside corporate accumulation had been viewed as the main drivers behind Ether’s 33% surge during the first three weeks of August.
From a trading standpoint, ETH’s volatility since Aug. 28 has led to $344 million in liquidations of leveraged long positions, a factor that may have dampened sentiment.
The long-to-short ratio of top traders across major exchanges helps illustrate positioning by combining spot, futures, and margin activity. At OKX and Binance, demand for longs slipped on Friday but has since steadied. Importantly, there has been no significant uptick in short interest, reinforcing the $4,300 support level.
Demand for ETH put (sell) options spiked between Saturday and Monday, but the trend flipped on Wednesday as call (buy) option activity rose. Ratios above 5 typically signal fear of downside risk since puts are more often used for neutral-to-bearish strategies.
ETH derivatives show strength, but $5,000 is questionable
ETH derivatives metrics suggest resilience, but the path toward $5,000 may take longer than investors expect as attention shifts to macroeconomic data.
The US Bureau of Labor Statistics JOLTS report released Wednesday showed the ratio of job openings to unemployed workers dropped to its lowest level since April 2021. “Unemployed workers are staying out of work for longer, even as layoffs remain low,” Indeed economist Allison Shrivastava reportedly told Yahoo Finance.
Gold prices surged to a new all-time high the same day, highlighting concerns about global growth and rising US fiscal debt. Analysts at JP Morgan reportedly raised their gold price forecast, citing expectations that the Federal Reserve will cut interest rates, lowering the appeal of bonds.
Related: Spot Bitcoin ETFs surge, Ether funds bleed as investors flee for safety
Demand for financial products on the Ethereum network gained traction as startup Etherealize announced a $40 million funding round on Wednesday. The company aims to expand infrastructure for wrapped financial assets such as mortgages and credit instruments. Venture firms Electric Capital and Paradigm led the investment, according to Fortune.
Ultimately, Ether’s trajectory toward $5,000 will depend on greater clarity around global economic conditions, currently pressured by the trade war and signs of a weakening labor market.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
