Key takeaways:
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Record Ethereum ETF inflows and accumulation by ETH corporate treasuries can drive demand to break $4,000.
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Rising network activity and Ethereum TVL metrics signal strong demand.
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ETH bull flag breakout targets $5,000.
Ether (ETH) is approaching a critical juncture as it nears the $4,000 resistance level, a barrier it has failed to breach three times since February 2024.
This time, however, several converging factors, including strong ETF inflows, robust network activity and favorable chart technicals, suggest a breakthrough may be imminent.
“With $4,000 now within arm’s reach, the big question is: will Ethereum blast through or break down?” said popular Defipeniel analyst in a July 22 post on X.
According to the analyst, reducing ETH supply on exchanges, increasing staked ETH post-Shanghai upgrade and high ETF demand provide a “cocktail of bullish energy” required to push ETH past $4,000.
Big ETF inflows and treasury demand
Institutional interest in ETH has risen considerably in recent weeks, driven by record-breaking ETF inflows and corporate treasury adoption.
US-based spot Ethereum ETFs have seen unprecedented demand, with single-day inflows reaching a record $727 million on July 16 and cumulative net inflows exceeding $9.33 billion since their July 2024 launch.
Related: SharpLink buys $295M in ETH — more than all the Ether issued last month
These investment products continue to show strength, drawing $452.72 million in net inflows on Friday and extending their inflow streak to 16 consecutive trading days, according to data from SoSoValue.
BlackRock’s ETHA ETF alone holds $10.69 billion worth, a stash that is growing at an accelerating pace, reflecting institutional confidence. Inflows into ETH ETFs have also outpaced Bitcoin ETFs for seven days in a row, suggesting capital rotation into Ether.
This influx of capital has shifted Ethereum’s role from a speculative asset to a core institutional holding, with companies like BlackRock and Fidelity filing for staked ETH ETFs to capitalize on yield-generating opportunities.
ETH also continues to grow as a corporate treasury reserve asset, with BitMine Immersion Technologies buying ETH worth $2 billion in the past 16 days, which propelled the company to become the largest corporate holder of ETH.
Currently, Ethereum treasury companies hold 2.33 million ETH, which amounts to 1.93% of ETH’s circulating supply, according to Strategic Ether Reserves.
Galaxy Digital CEO Michael Novogratz has predicted that the price of ETH will reach $4,000, adding that ETH will outperform BTC in the next six months.
Ethereum’s network activity shows strength
Ethereum’s network fundamentals are near record highs, with daily average transactions climbing to 1.62 million on Friday from 932,000 over the past three months, representing a 73% increase, as per data from Nansen. Daily active addresses rose to a 12-month high of 670,000 on Saturday.
The average weekly transaction count rose to an all-time high of 10.07 million last week while weekly DEX volumes rose to a 21-week high of $22.54 billion, according to data from DefiLlama.
The total value locked in Ethereum’s DeFi protocols is back to the highest levels since 2022 at $86 billion, capturing 61% of the market share.
Meanwhile, balance on exchanges has dropped to 15.6 million ETH, a level last seen before the 2017 rally, as per Glassnode data. These dynamics suggest a potential supply squeeze that could help propel ETH price toward new all-time highs.
Ether price bull flag targets $5,000
The ETH/USD pair is well-positioned to resume its gains after breaking out of a bull flag pattern on the four-hour chart, as shown in the figure below.
The pattern was resolved when the price closed above the flag’s upper boundary at $3,740 (where the 50-period SMA currently sits ) on Saturday, signalling the start of an upward move.
The flagpole’s height sets the target, which projects Ether’s price rising to $5,000 as soon as next month, a 30% increase from the current price.
The relative strength index is also showing bullish cues, moving within the positive region at 61. This suggests the price can go higher before overbought conditions set in.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
