Ethereum ETFs attracted $11M inflows despite recent market volatility and ETH price drop.
ETH price recovered from $2.39k to $2.4k amid declining selling pressure.
Traders remain cautious, hedging short-term risks while ETH aims to retarget $3k.
Ethereum ETFs showed surprising strength during recent market turbulence. While Bitcoin ETFs saw heavy outflows, Ethereum products attracted $11.26 million on June 5. This steady inflow marks 16 straight days of positive demand, signaling strong institutional confidence in ETH. Yet, Ethereum’s price still slipped nearly 7% amid broader market fears. The big question remains: how will Ethereum bounce back from this dip, and what lies ahead for investors?
https://twitter.com/Bitt_Belle/status/1931353386420507012 ETH’s Price Dip and Signs of Recovery
On June 5, Ethereum’s price dropped sharply from $2,600 to $2,390. By press time, it managed to regain some ground, sitting just above $2,400. The drop triggered a massive $454 million in profit-taking. Leveraged traders felt the heat, with bulls losing $256 million in forced liquidations over 24 hours, while shorts lost only $30 million. This pressure signaled a temporary struggle for buyers, but the overall selling pace has eased since then. One useful measure, the seller exhaustion indicator, fell to levels last seen in April.
This metric tracks profit-taking and volatility spikes, often predicting market bottoms. When spikes rise, risky tops usually follow. But when the indicator drops low, it suggests a buying opportunity. April and last October saw low readings before strong rebounds, offering hope for Ethereum holders today. Renewed interest from treasury companies adds fuel to this optimistic outlook. If buying momentum continues, crossing that psychological $3,000 mark could become reality sooner than expected.
Market Caution and Short-Term Sentiment
Despite positive signs, traders remain cautious. Options market data shows a spike in demand for puts, or bearish bets, over calls, indicating hedging against price drops. The 1-week and 3-month option tenors particularly saw sharp increases in put demand. This suggests traders expect potential downside risks in the near term, perhaps influenced by external events like the Musk-Trump drama shaking market confidence.
Even with these bearish moves, the 1-week skew softened from 5% to 3%, implying traders remain watchful but hopeful. The brief price rebound to $2,400 ahead of the weekend reflects this cautious optimism. Ethereum’s journey will likely depend on balancing this short-term caution with growing institutional support through ETFs. Institutional investors placing $11 million into Ethereum ETFs during such volatility sends a strong message.
While traders hedge their bets for now, the continued inflows hint that many expect Ethereum to regain strength as risk-off fears fade. For now, Ethereum ETFs continue to attract steady institutional money despite recent price drops. The altcoin faces short-term uncertainty but shows technical signs of a buying opportunity. Growing treasury interest and ETF inflows support a potential rally back toward $3,000.
