Ethereum Poised for ‘Catch-Up’ Rally as Institutional Inflows Surge
Key Takeaways
- Ether (ETH) bulls target liquidity pockets around the $2,500 mark, buoyed by technical indicators like a dragonfly doji and a resilient support level tested below $2,200.
- Over 90% of the Bitcoin (BTC) supply is currently in profit, contrasting with ETH’s lower profit percentage, suggesting a potential “catch-up” rally for Ethereum, a pattern seen in previous market cycles.
- Spot Ethereum ETF inflows surged 68% in June compared to May, signaling increasing institutional appetite for ETH.
Ethereum (ETH) prices climbed back towards the $2,500 threshold on Monday, fueled by aggressive buying near key liquidity zones. A CoinGlass liquidation heatmap underscores the bullish trend, suggesting market makers may be hunting stop-loss orders in the $2,500 vicinity, potentially triggering a short squeeze and pushing prices higher.
Technical analysis points to strong buyer interest after ETH successfully held a significant support range between $2,100 and $2,200 for an extended period. The subsequent three-day chart closed above $2,400, punctuated by a dragonfly doji candlestick. This pattern, featuring a lengthy lower wick and a closing near its high, suggests sellers pushed prices down early but buyers ultimately retook control.
The current price surge marks the highest volume engagement for ETH since July-August 2022, indicating a renewed wave of retail and institutional interest. The liquidation heatmap further supports this view, demonstrating ETH consistently forming higher lows above major liquidation clusters, reinforcing a path of least resistance pointing upwards.
Onchain data highlights a significant development: Binance recorded over 61,000 ETH withdrawn on Monday. This large outflow from the world’s largest exchange, often interpreted as traders moving assets from short-term speculation to long-term holding strategies, adds a bullish dimension to the current rally.
Ethereum Could Play ‘Catch-Up’ to Bitcoin
Recent analysis by Swissblock suggests ETH could be entering a “Zone 5” accumulation phase, mirroring historical cycles like 2017 and 2021, where Ethereum significantly outperformed. The current data highlights a stark contrast: over 90% of the BTC supply is in profit, limiting short-term upside potential, while ETH’s supply in profit hovers around 80%, indicating it is lagging significantly behind Bitcoin in terms of profit realization.
The ETH/BTC ratio approaching multi-year lows serves as another signal of potential undervaluation relative to Bitcoin. Swissblock interprets the current phase as a precursor to capital rotation shifting towards altcoins like ETH once Bitcoin nears its peak performance cycle.
Institutional flows provide concrete evidence of this potential shift. While spot Bitcoin ETF inflows dropped significantly (from $5.23 billion in May to $2.64 billion in June), spot Ethereum ETF inflows surged to $950 million in June compared to $564 million in May (a 68.4% month-on-month increase). In contrast, BTC ETFs saw a 49.5% month-on-month decline.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
