Ethereum Rally Cools Near $3,700 as Futures Outpace Spot Momentum

Ethereum $ETH has posted a strong 20% gain over the past week, reclaiming the $3,500 level and briefly testing resistance near $3,700. Despite its impressive rally—bolstered by record ETF inflows and heightened on-chain activity—ETH now faces a tough supply zone that could limit near-term upside.

According to market data, ETH is up over 41% on the month, but recent price action suggests consolidation may be on the horizon. The 100-day moving average is nearing a crossover above the 200-day MA, hinting at a potential golden cross—a traditionally bullish long-term signal.

However, a notable divergence between futures and spot markets is raising red flags. Futures open interest continues to climb with $267 million in liquidations in just 24 hours, while spot trading volume remains flat. This imbalance points to speculative overheating and increases the risk of short-term volatility.

ETF flows remain a key bullish driver, with $7.49 billion in cumulative inflows and a 280% surge in on-chain activity over the past two weeks. Analysts say institutional demand could ultimately push ETH beyond the $4,000 psychological barrier, but without broader spot market participation, upside could stall.

In the short term, ETH is likely to trade between $3,500 and $3,800, with $3,700 acting as a critical resistance. A confirmed breakout above $4,000 would require both continued institutional flows and a resurgence in spot buying to sustain momentum.