Ethereum (ETH) Sees $2.3B Inflows Amid ETF Anticipation, Fueling Market Optimism

• Ethereum recently experienced a significant price move, triggering a large volume of short liquidations and leading to a record inflow volume.
• Amid these developments, there is speculation that institutions might be preparing for the potential approval of an Ethereum-based financial product.
• On the 21st of May, around 627,770 ETH, valued at over $2.3 billion, flowed into exchanges, marking the second-largest inflow volume in over a year.

Ethereum sees $2.3B in inflows as ETF anticipation sparks optimism.

Ethereum Sees Significant Flow into Exchanges

AMBCrypto’s analysis of Ethereum’s inflow chart on CryptoQuant showed that traders have moved to take advantage of the recent price increase. On the 21st of May, around 627,770 ETH, valued at over $2.3 billion at approximately $3,789 per ETH, flowed into exchanges. This marked the second-largest inflow volume in over a year. The largest inflow occurred in March when 648,000 ETH, also worth about $2.3 billion, were transferred. At press time, the inflow had already exceeded 100,000 ETH.

Due to these substantial inflows, Ethereum’s Netflow has been positive over the past few days. The Netflow indicated that more ETH was entering exchanges than leaving. On the 21st of May, the Netflow was around 49,000 ETH — this trend continued with an additional Netflow of over 5,600 ETH at the time of writing.

Ethereum Shorts See More Liquidation

Another effect of the recent Ethereum price increase has been a surge in liquidation volume. According to AMBCrypto’s analysis of the liquidation chart, short traders have experienced significant liquidations in the past few days. On the 20th of May, approximately 20,558 ETH, valued at over $75.2 million, were liquidated, marking the second-highest short liquidation volume in over a year. The trend continued on the 21st of May, with over 11,600 ETH worth around $44 million being liquidated.

Institutions Preparing for ETF Approval?

Amid the recent price increase in Ethereum, there is growing speculation about the imminent approval of an Ethereum ETF. Commentators are optimistic about this approval, and some analysts believe that institutions are already preparing for it. A CryptoQuant chart showed notable outflows of ETH on Coinbase on the 11th and 27th of March and 18th April, with volumes of approximately -134,000, -120,454, and -133,000 ETH, respectively. Similar outflow patterns were observed on Coinbase before the announcement of the Bitcoin ETF approval in January, suggesting that institutions might be positioning themselves for a potential approval now as well.

ETH Sees a Slight Drop

Ethereum surged to approximately $3,661 following a 19% increase on the 20th of May. According to AMBCrypto’s assessment of the daily time frame chart, this upward trend continued on the 21st of May, with ETH reaching around $3,789 after a 3.50% increase, hitting a price zone last seen in March. As of this writing, Ethereum was trading at about $3,749, reflecting a decline of just over 1%.

Conclusion

In summary, Ethereum has seen substantial inflows and a significant price rise, leading to notable short liquidations. The speculation around the potential approval of an Ethereum ETF has further fueled market activity. As institutions possibly prepare for this approval, Ethereum’s market dynamics continue to evolve rapidly. Investors should keep a close watch on these developments to make informed decisions.