Key Takeaways
ETH was well-positioned to extend its rally to $5K after defending $4.5K as support. But ETH bulls must contend with cooling ETF inflows and renewed SOL momentum.
Since mid-August, the Ethereum [ETH] price has been holding above $4K after price rejection near $5K.
Amid the September recovery, the altcoin has cleared key roadblocks, raising the odds of crossing $5K, but there are two crucial factors for a strong move.
In their recent update, Swissblock analysts noted that the only upside hurdle was at $4.8, and bulls could clear it if they defend $4500.
“The key is holding $4,500 and then $4,650 to unlock the path toward $5,000. ETH looks ready.”
Source: Swissblock
But they added that Solana [SOL] has outperformed ETH by over 15% this month, and could challenge ETH’s momentum.
ETH ETF flows ease
Another bearish data set was a decline in spot ETH ETF inflows. According to CryptoQuant analyst JA Maartun, the institutional momentum that lifted ETH from May has reduced significantly.
Source: CryptoQuant
In the past few days, the slow ETH ETFs have also dragged the ETH/BTC ratio lower, underscoring that BTC outperformed ETH recently.
If BTC and SOL take the lead in the next leg of the rally, the ETH uptrend could be slow. However, Swissblock analysts quipped,
“It has taken advantage of ETH’s recent weakness and accumulation, but ETH could still come back with strength.”
Meanwhile, the Coinbase Premium Index has been positive and rising since 9th September. This suggested that the U.S retail has been accumulating the altcoin ahead of the Fed rate cut decision.
Source: CryptoQuant
In most cases, a rising Coinbase Premium Index has always been positively correlated with ETH’s rallies. Simply put, whenever U.S retail appetite increases, ETH price tends to explode.
But ahead of the Fed rate decision, any liquidity hunt-driven rally could tag $4250, which had $2 billion in leveraged longs that could act as a price magnet.
Source: CoinGlass
Northwards, however, there was nothing to hold back the bulls beyond $5K. It remains to be seen whether SOL and BTC momentum will steal ETH’s traction after the Fed rate decision.
