Ethereum primed for positive Q3 following slow inflation and launch of ETH ETF

• 
  Ethereum
  could
  rally
  in
  Q3
  following
  reduced
  US
  inflation
  and
  launch
  of
  spot
  ETH
  ETFs.
• 
  Ethereum’s
  on-chain
  activity
  shows
  mixed
  sentiment
  among
  investors.
• 
  Bearish
  exhaustion
  candle
  could
  signify
  a
  downturn
  for
  ETH
  if
  SEC
  delays
  ETH
  ETF
  approval.

Ethereum
(ETH)
is
up
0.5%
on
Thursday
following
cooling
inflation
reports
in
the
US.
However,
mixed
on-chain
sentiment
signals
uncertainty
among
investors
despite
the
potential
launch
of
spot
ETH
ETFs.

Daily
digest
market
movers:
CPI
data,
mixed
on-chain
signals,
increasing
supply

Ethereum’s
price
is
expected
to
react
positively
in
the
coming
days
to
the
recent
decline
in
the
US
Consumer
Price
Index
(CPI),
a
metric
for
measuring
the
cost
of
goods
and
services.
The
CPI
for
June
declined
by
0.1%
from
May,
beating
market
expectations
and
reaching
a
three-year
low.
As
a
result,
many
expect
the

Federal
Reserve
(Fed)
to
cut
rates
in
September.

Combined
with
the
potential
launch
of
spot
ETH
ETFs
in
the
coming
days,
many
expect
Ethereum
to
have
a
positive
Q3.
This
also
aligns
with
predictions
from
JP
Morgan
analysts
that
the
crypto
market
will
rebound
in
August.

Also,
on-chain
activity
shows
that
Ethereum
has
been
facing
a
flurry
of
exchange
deposits
and
withdrawals
in
the
past
24
hours,
according
to
data
from
Lookonchain.
This
shows
mixed
sentiment
and
uncertainty
among
ETH
investors.
As
some
are
de-risking,
others
are
accumulating
their
selling
pressure,
keeping
the
price
of
ETH
in
a
somewhat
horizontal
trend.

The
key
transactions
include
Golem
pausing
its
ETH
selling
spree
after
staking
40,000
ETH,
a
whale
depositing
10,000
ETH
into
Binance,
another
withdrawing
16,074
ETH
in
the
past
week,
and
HTX
founder
Justin
Sun
increasing
his
ETH
holdings.

Meanwhile,
despite
increasing
staking
deposits,
ETH’s
supply
has
started
trending
upwards
since
the
Ethereum
Dencun
upgrade
in
March.
As
the
chart
from
Bitwise
below
shows,
ETH’s
supply
trended
downward
to
-450K
between
The
Merge
and
Q1
’24.
It
started
moving
upwards
in
Q2’24
following
the
Dencun
upgrade.
If
ETH
continues
on
this
path,
it
will
lose
its
deflationary
status.

ETH
Supply
change
since
The
Merge

ETH
technical
analysis:
Ethereum
posts
bearish
exhaustion
candle

Ethereum
is
trading
around
$3,125
on
Thursday,
up
0.5%
on
the
day.
ETH
has
seen
$26.27
million
in
liquidations
in
the
past
24
hours,
with
long
and
short
liquidations
accounting
for
$17.05
million
and
$9.23
million,
respectively.

While
the
market
remains
gloomy,
ETH
is
taking
a
slow
ride
up,
offsetting
its
weekly
losses
as
the
market
anticipates
the
launch
of
spot
ETH
ETFs.

However,
ETH
posted
a
bearish
exhaustion
candle
on
the
8-hour
time
frame
after
attempting
to
sustain
a
move
above
the
$3,200
price.
An
exhaustion
candle
has
a
long
wick
2-3
times
the
length
of
its
body
and
little
or
no
wick
on
the
other
side.
If
a
bearish
exhaustion
candle
appears
during
an
uptrend,
it
indicates
bulls
may
be
losing
momentum,
and
vice
versa
if
a
bullish
exhaustion
candle
appears
during
a
downtrend.

ETH/USDT
8-hour
chart

In
the
case
of
ETH,
the
reversal
suggests
that
some
of
the
over
2
million
addresses
that
purchased
ETH
around
$3,200
sold
as
they
broke
even,
according
to
earlier
predictions.

While
it
seems
ETH
may
tilt
toward
the
downside
after
the
bearish
exhaustion
candle,
optimism
from
lower-than-expected
CPI
data
and
the
Securities
&
Exchange
Commission
(SEC)
approving
issuers’
ETH
ETF
S-1
drafts
may
see
it
attempt
another
move
above
the
$3,200
price
level.
The
move
up
may
see
$3.73
million
worth
of
shorts
being
liquidated
around
the
$3,222
price
level.

However,
if
the
SEC
continues
delaying
approval
of
ETH
ETF,
Ethereum
will
likely
fall
back
to
the
$2,900
to
$3,000
price
level.