Ethereum Bounces as Grayscale’s Ether ETF Posts First Daily Inflow

Crypto markets traded higher on Tuesday, coinciding with the Grayscale Ethereum Trust (ETHE) recording its first day without outflows since launching.

Ethereum (ETH) rallied 1.7% to $2,635, while Bitcoin (BTC) posted a modest 0.11% gain to $58,882, Polkadot (DOT) fell by 2%, and Solana (SOL) is up 0.12%.

Sats (1000SATS) was the strongest performing top 100 cryptocurrency by market capitalization over the past 24 hours with a 15% gain, followed by Ordi (ORDI) with 9%, and Eos (EOS) with 2%. Lido DAO (LDO) was the worst performer with a 5% drawdown, followed by Dogwifhat (WIF) which dropped 4.41%.

Spot Ether flows turn bullish

On Monday, Ether exchange-traded funds (ETFs) recorded $4.93 million in net inflows, marking the fifth positive inflow day since ETH ETFs went live for trading on July 23, according to Farside data. Spot Bitcoin ETFs also reported inflows of $27.8 million.

ETHE’s daily inflow followed 14 straight days of outflows since launching. For comparison, Grayscale’s Bitcoin Trust (GBTC) took nearly four months to achieve a day without outflows.

ETHE has hosted $2.29 billion worth of outflows so far, driving significant outflows for the Ether ETF sector during the first two weeks of operations. With the sector hosting net inflows last week as outflows from Grayscale subside, the milestone suggests the sector may enjoy positive flows moving forward.

Analysts skeptical of crypto rebound

Despite most cryptocurrencies partially rebounding from last night’s violent crash, analysts are approaching the markets with caution as Bitcoin and Ethereum struggle to reclaim key resistance levels above $60,000 and $2,700 respectively.

“While the price recovery has been strong… the market remains cautious in the near term with a BTC put skew out till September,” QCP Capital analysts said. “In the previous two sharp drawdowns this year (April and June), BTC recovered back above $70k in less than a month.”

“With BlackRock consistently reporting positive inflows through the week, we expect continued liquidity and support from US investors,” they added.

Arthur Hayes, the co-founder of Bitmex and CIO of Maelstrom Fund, penned a blog post on Tuesday asserting that the broader digital asset markets will turn bullish if Bitcoin and Ether can reclaim key psychological levels.

“Alt szn (season) will return only after Bitcoin and Ether decidedly break through $70,000 and $4,000, respectively,” Hayes wrote. “The combination of a dollar liquidity-inspired Bitcoin and Ether rally into year-end will create a strong foundation for the return of a se*y shi*coin soiree.”

Stock futures rise as inflation slows

U.S. stock futures rose early Tuesday as investors waited for key inflation data. S&P 500 futures and Nasdaq-100 futures climbed 0.3% and 0.5%, respectively, while the Dow Jones Industrial Average futures remained flat.

The producer price index, a measure of wholesale prices, came in at 0.1% — lower than pundits’ expectation of 0.20% — indicating that inflation continues to slow down.

Investors also await the consumer price index (CPI) data on Wednesday. This data could guide the market after last week’s volatility.