Key takeaways:
Spot Ether ETFs experienced record inflows of $7.88 billion in July and August, pushing custodial holdings to 6.42 million ETH.
ETH reached $4,650 after a 10% surge following Powell’s suggestion of a potential rate cut in September.
Ether surges 10% post-Powell’s Jackson Hole address
On Thursday, Ether surpassed the $4,350 resistance, testing the supply zone between $4,550 and $4,650 after Federal Reserve Chair Jerome Powell hinted at a possible rate cut in September, triggering a strong response across risk assets.
Powell’s comments indicate a shift in policy, noting that the balance of risks “may warrant adjusting policy.” He pointed out increasing downside risks to employment and a softening labor supply in line with demand, along with the Fed’s move away from flexible average inflation targeting. Notably, Powell cautioned that stable inflation expectations cannot be taken “for granted.”
Ether four-hour chart. Source: Cointelegraph/TradingView
His speech acted as a catalyst for Ether’s breakout, with ETH achieving a 7% hourly return immediately thereafter. This marks a decisive close above the $4,350 level, previously tested five times this week, confirming a short-term bullish break of structure. Additionally, the breakout aligns with an inverse head-and-shoulders pattern, indicating a bullish setup prior to Powell’s address.
With momentum now shifting upward, ETH could further extend gains towards highs above $4,800, where sellers might attempt to reassert pressure.
Related: BlackRock leads $287M spot Ether ETF inflows after four-day outflow streak
ETH emerges as TradFi’s new favorite
Ether (ETH) is solidifying its position as a new favorite among institutions and corporate treasuries, propelled by spot ETH ETFs that have driven historic inflows. In July, net inflows reached $5.43 billion, followed by $2.45 billion in August, marking the strongest quarter of ETH ETF demand to date.
According to CryptoQuant, ETH custodial holdings within ETFs soared to 6.42 million ETH on August 21, up from 4.15 million ETH on July 8—an impressive increase of 2.27 million ETH over just six weeks. This indicates roughly 58% growth during this period, making it one of the most aggressive accumulation phases since the launch of ETH ETFs.
Total ETH ETF holdings. Source: strategicethreserve.xyz
CryptoQuant noted that the rapid inflow into ETFs signals a “structural demand shock,” as tokens are locked into custodial vehicles and withdrawn from spot exchange liquidity. This creates thinner order books, making similarly sized trades exert a greater impact on price action, thus increasing ETH’s sensitivity to ETF rebalancing and redemption flows.
Nonetheless, sustained ETF demand establishes a consistent bid beneath the market, facilitating higher realized prices and reducing volatility.
In a bullish context, analyst Ted Pillows indicated that Ether whales are also increasing in number. The count of addresses holding over 10,000 ETH has risen by more than 200 since July, further supporting the narrative of institutional accumulation. Overall, ETF custodians and strategic treasury firms now hold a combined 10.52 million ETH.
Ether addresses with more than 10K ETH. Source: TedPillows/X
Related: EU exploring Ethereum, Solana for digital euro launch: FT
This article does not encode investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own due diligence.
