- Ethereum ETF recorded an inflow of $285 million, showing confidence from institutions after months of consecutive capital outflows.
- Positive funding rates and strong futures contract market activity indicate a bullish sentiment, although macro risks still exist.
Ethereum [ETH] is gradually regaining momentum. Since mid-May, Ethereum ETF funds have been continuously receiving weekly inflows, reflecting increasing interest from institutional investors.
Along with prolonged positive funding rates, this leading altcoin seems ready for a sustainable growth trend.
However, with the Federal Reserve's FOMC meeting scheduled for June 17, uncertain factors could complicate Ethereum's price increase.
Can ETH maintain its growth momentum, or will external impacts hinder its progress?
ETF Capital Flow Recovers After Long Withdrawal Period
After months of continuous capital outflows, Ethereum ETF funds have strongly reversed, with $285.84 million in net inflows just in the past week.
This is the third consecutive week of positive capital flow, a stark difference from the red period of outflows from February to mid-April.
Source: SoSoValue
The reversal began in late April and strengthened in May, with total net assets reaching $9.45 billion. Although Ethereum's price remains low, the inflow indicates growing confidence from institutional investors.
Ethereum: Derivatives Market Reinforces Confidence
Source: CoinGlass
Funding rates on major exchanges remained positive throughout May, consistently staying above the neutral threshold of 0.008%. This indicates traders are willing to pay higher fees to maintain long positions, reflecting confidence in price increases.
Source: CoinGlass
Additionally, Open Interest in Ethereum Futures Contracts surpassed $30 billion mid-month and remained stable near this level in early June, despite some price adjustments.
The combination of maintained leverage and positive funding rates shows speculative demand has not diminished.
Cannot Ignore the Broader Macro Picture
Capital inflows from ETF and strong on-chain factors support a positive outlook for Ethereum. However, the market remains sensitive to macro factors like inflation data and Federal Reserve policies.
The upcoming FOMC meeting could be a crucial turning point. If the Fed takes a moderate stance, Ethereum could benefit from new capital inflows, fueling growth. Conversely, a tightening attitude could cause volatility in risky assets.
Despite positive indicators from staking, stablecoin flows, and Layer-2 development, ETH remains susceptible to macroeconomic fluctuations.
