Ethereum has set off bullish alarms this week. The price of $ETH surpassed $3,400 driven by a remarkable flow of capital into the new spot Ethereum ETFs. In just one day, these products attracted over $720 million, marking a historic high since their approval and surprising many analysts with the speed of institutional entry. This figure raises the total accumulated flows by Ethereum ETFs to over $5.5 billion, solidifying ETH as one of the favorite options among fund managers seeking exposure to the crypto ecosystem without the need to directly acquire the asset. The phenomenon not only validates the existing demand for financial products linked to Ethereum but also projects a new horizon of growth as more institutional players enter the space with renewed confidence.
Fundamentals behind the surge
The rise in ETH's price is not just a reflection of retail investor enthusiasm. In fact, several fundamental factors are acting as catalysts for this bullish movement:
Record flows into ETFs: The approval of spot Ethereum ETFs by the SEC in May 2024 marked a key milestone for the crypto ecosystem. While the market had already anticipated this decision, its effective implementation in recent weeks unleashed an immediate wave of capital inflows. Just in a recent session, ETH ETFs attracted over $720 million, an absolute record since their launch. This strong response from institutional investors not only evidenced the pent-up demand but also directly pushed the price of Ethereum above $3,400. The availability of this new regulated channel has reinforced ETH's bullish momentum and consolidated its appeal as a strategic asset within the institutional portfolio.
Favorable macroeconomic context: The prospect of a more relaxed monetary policy, with expectations of interest rate cuts by the Federal Reserve in the coming quarters, has improved risk appetite among investors. Additionally, the evolution towards a clearer regulatory framework in the U.S. and Europe has reduced the legal uncertainty that weighed on many digital assets. This combination of factors has created a more favorable environment for institutional adoption of crypto assets like Ethereum.
Positive technical indicators: Ethereum has experienced strong bullish momentum in recent days, breaking previous resistances with large-bodied candles and high volume. The RSI (relative strength index) is currently above 84, placing it in overbought territory. Although this can be interpreted as a warning of potential exhaustion, in bullish contexts, it often reflects strength of the movement. Additionally, the behavior of volume and price structure supports the idea of a solid trend, with buyers taking control. Price action suggests that, as long as institutional interest remains and support stays above $3,200, ETH could continue to show positive momentum in the short term.
Can Ethereum reach $4,000 or more?
With the current momentum and renewed institutional interest, many observers believe that Ethereum could not only consolidate above $3,400 but also aim to surpass $4,000 in the coming weeks. This view is supported by the fact that ETFs are not only capturing capital but also stability: outflows have been minimal and demand remains consistent.
Moreover, the continued use of Ethereum in DeFi applications, NFTs, and scaling solutions like Layer 2 reinforces its role as essential infrastructure within the Web3 ecosystem.
What to watch?
Sustainability of flows into ETFs: The recent price rise has been closely linked to the record volume of capital entering ETH spot ETFs. While this represents a sign of institutional confidence, its sustainability will be key to maintaining current momentum. A slowdown or change in the trend of inflow could translate into bearish pressure on the price. Therefore, it is essential to observe not only the magnitude of the flows but also their consistency over the coming weeks.
Macroeconomic conditions: Key data such as inflation indices, Federal Reserve monetary policy decisions, and interest rates continue to be determining factors for the behavior of the crypto market. A more accommodative policy could foster greater appetite for risk assets like ETH, while signs of monetary tightening could act as a brake on current momentum. The market will continue to react sensitively to each new economic data point or intervention from central banks.
Network activity: The burning of ETH, driven by active network use in transactions and smart contracts, continues to reduce the circulating supply, which may create upward pressure on the price. Additionally, growth in metrics such as the number of daily transactions, the use of DeFi applications, and activity in Layer 2 solutions reinforces the intrinsic value of Ethereum as technological infrastructure. These indicators reflect a healthy and expanding network, providing additional fundamental support to price action.
Ethereum has regained strength with solid fundamentals behind its recent surge. The massive inflow of capital via ETFs represents a structural shift in its institutional adoption. Although the market remains volatile, current signs reinforce a constructive narrative that could set the tone for ETH in the second half of 2025.
And what do you think?
Do you think Ethereum will break $4,000 in the coming weeks? Are we witnessing the beginning of a new phase for ETH? Share your analysis and comment on how you see the future of Ethereum.
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Note: This article should not be considered financial advice. Always conduct your own research and make informed decisions when investing in cryptocurrencies.
