Institutional demand for Ethereum [$ETH] eased slightly ahead of U.S. inflation data and rising oil prices. The U.S. spot $ETH ETFs saw $14.59 million in daily net outflows on the 10th of August. This broke its recent four days of consecutive outflows.
Will selling pressure keep $ETH stuck below $2K?
Besides the slow institutional appetite, there was a broader uptick in selling pressure across exchanges. According to CryptoQuant data, the weekly Exchange Netflow has been climbing higher in August.
The metric tracks the net difference between $ETH entering exchanges and $ETH being moved out.
A positive and rising number implies increasing selling pressure across spot exchanges. On the contrary, a negative reading (or downslope on the chart) suggests more $ETH is being withdrawn, a bullish signal.
After slowing in July, the metric’s continued rise in August meant increased selling pressure. On the 10th of August, the metric spiked higher again. This coincided with $ETH’s sharp 3% price drop as the altcoin slipped from $1920 to $1875.
Ethereum price vs. CPI data
That said, traders have been using the $1800-$1960 price range for opportunities. Notably, there is scheduled U.S. inflation data (CPI) on the 12th of August. The price range could still be exploited for potential trading opportunities ahead of the data.
Cooler inflation data could raise the odds of another Fed rate cut. However, higher inflation figures would reinforce the ongoing Fed rate hike fears. This may send markets lower, including $ETH.
Currently, the market is 50/50 on the Fed’s next move. This makes Wednesday’s inflation data a crucial catalyst that could sway the odds and directly affect market sentiment.
That said, the Options market positioning leaned more toward a potential extension of the Q3 sideways structure.
Notably, institutional players were betting on a possible move towards $2K by the end of August or September (green bars tracking bullish calls). Moreover, there was considerable hedging against downside moves towards $1700 and $1650.
$ETH’s overall selling pressure has remained elevated despite the improved institutional demand in the past few days. Still, the price could be impacted by Wednesday’s inflation data. The $1800 and $1700 could be lower targets if the data is negative for $ETH.
Otherwise, if inflation cools, $ETH price may reclaim $1900, and eye the $2000 psychological level.
Final Summary
- $ETH has seen rising selling pressure across exchanges in August.
- Whether the Q3 price range of $1800-$1960 holds or extends may partly be influenced by Fed rate expectations.
