Key takeaways:
Spot Ether ETFs experienced unprecedented inflows of $7.88 billion in July and August, increasing custodial holdings to 6.42 million ETH.
ETH reached $4,650 following a 10% surge after Powell hinted at a potential rate cut in September.
Ether surges 10% after Powell’s Jackson Hole address
Ether surpassed the $4,350 resistance on Thursday, probing the supply zone between $4,550 and $4,650 after Federal Reserve Chair Jerome Powell suggested a possible rate cut in September, igniting a robust reaction across risk assets.
Powell’s comments indicate a changing policy perspective, mentioning that the balance of risks “may justify policy adjustments.” He pointed to increasing downside risks to employment and a softening of labor supply against demand, along with the Fed’s departure from flexible average inflation targeting. Notably, Powell also warned that stable inflation expectations should not be presumed “for granted.”
The address provided the spark for Ether’s rise, with ETH achieving an hourly return of 7% right after the remarks. This move signifies a clear close above the $4,350 threshold, a level tested five times earlier in the week, confirming a short-term bullish break in structure. The bullish breakout also occurred following the formation of an inverse head-and-shoulders pattern, indicating a positive setup prior to Powell’s speech.
With momentum shifting upward, ETH could push gains toward highs beyond $4,800, where sellers may seek to regain control.
Related: BlackRock dominates $287M spot Ether ETF inflows after four-day outflow streak
ETH becomes the new favorite in TradFi
Ether (ETH) continues to cement its position as a favored asset among institutions and corporate treasuries, driven by spot ETH ETFs witnessing historic inflows. July recorded net inflows totaling $5.43 billion, followed by an additional $2.45 billion in August, marking the strongest quarter for ETH ETF demand to date.
Data from CryptoQuant indicates that ETH custodial holdings within ETFs hit 6.42 million ETH on Aug. 21, rising from 4.15 million ETH on July 8, showcasing a total increase of 2.27 million ETH within six weeks. This translates to roughly 58% growth during this period, highlighting one of the most aggressive accumulation phases since ETH ETFs launched.
CryptoQuant pointed out that swift inflows into ETFs signify a “structural demand shock,” as tokens are locked into custodial vehicles, reducing available liquidity on spot exchanges. With thinner order books, similarly sized trades now have a more pronounced effect on price movements, making ETH more responsive to ETF rebalancing and redemption flows.
However, ongoing ETF demand provides a consistent support base in the market, maintaining higher realized prices and reducing volatility.
Adding to the positive outlook, analyst Ted Pillows noted that Ether whales are also increasing in number. The quantity of addresses holding over 10,000 ETH has climbed by more than 200 since July, bolstering the institutional accumulation narrative. In total, ETF custodians and strategic treasury companies now possess a combined 10.52 million ETH.
Related: EU exploring Ethereum, Solana for digital euro launch: FT
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
