Key takeaways:
Spot Ether ETFs recorded unprecedented inflows of $7.88 billion in July and August, boosting custodial holdings to 6.42 million ETH.
ETH hit $4,650 after a 10% surge following Powell’s hints of a possible rate cut in September.
Ether surges 10% post-Powell’s Jackson Hole address
Ether surpassed the $4,350 resistance on Thursday, exploring the supply zone between $4,550 and $4,650 after Federal Reserve Chair Jerome Powell indicated the potential for a rate cut in September, eliciting a significant response across risk assets.
Powell’s statements reflect a changing policy stance, asserting that the balance of risks “may require adjusting policy.” He highlighted increased downside risks to employment and a softening labor supply in relation to demand, along with a transition away from the flexible average inflation targeting framework. Notably, Powell warned that stable inflation expectations cannot be “taken for granted.”
The address provided a catalyst for Ether’s breakout, with ETH achieving an hourly return of 7% immediately after the comments. This movement represents a decisive close above the $4,350 barrier, a level that had been tested five times earlier in the week, confirming a short-term bullish break of structure. The bullish breakout also occurred following the formation of an inverse head-and-shoulders pattern, indicating a bullish setup prior to Powell’s speech.
With momentum now on the rise, ETH could push gains towards levels above $4,800, where selling pressure may re-emerge.
Related: BlackRock leads $287M spot Ether ETF inflows after four-day outflow streak
ETH emerges as TradFi’s new favorite
Ether (ETH) is increasingly establishing itself as a preferred choice among institutions and corporate treasuries, with spot ETH ETFs driving historic inflows. July saw net inflows of $5.43 billion, followed by an additional $2.45 billion in August, marking the strongest quarter for ETH ETF demand on record.
Data from CryptoQuant indicates that ETH custodial holdings within ETFs reached 6.42 million ETH on August 21, up from 4.15 million ETH on July 8, reflecting an increase of 2.27 million ETH over just six weeks. This signifies approximately 58% growth during that period, representing one of the most significant accumulation phases since ETH ETFs became operational.
CryptoQuant reported that the rapid inflow into ETFs indicates a “structural demand shock,” as tokens are locked into custodial accounts and removed from the liquidity of spot exchanges. With thinner order books, similarly sized trades now have a larger influence on price action, making ETH more responsive to ETF rebalancing and redemption flows.
However, sustained ETF demand creates a consistent support beneath the market, aiding higher realized prices and reducing volatility.
In addition to this bullish perspective, analyst Ted Pillows noted that Ether whales are expanding. The number of addresses holding over 10,000 ETH has increased by more than 200 since July, reinforcing the institutional accumulation narrative. Overall, ETF custodians and strategic treasury companies now control a combined 10.52 million ETH.
Related: EU exploring Ethereum, Solana for digital euro launch: FT
This article does not constitute investment advice or recommendations. All investment and trading activities involve risk, and readers should conduct their own research before making decisions.
