Ethereum (ETH) is showing conflicting market indicators as on-chain data developments collide with constant outflows from Ethereum spot exchange-traded funds (ETFs).
According to IntoTheBlock’s “On-chain Insights” newsletter, the price of ETH has surged more than 7% over the past week, with “in-the-money” addresses increasing from 59% to 66%. Additionally, 82% of ETH volume is currently profitable.
Additionally, network activity has seen a significant increase, with weekly fees reaching $45 million, the highest since June 10, 2024. The Ethereum derivatives market is also showing renewed optimism, as evidenced by a positive evolution of the 30-day moving average of financing rates.
However, these positive developments are contrasted by large outflows from Ether ETFs, which saw their largest withdrawals since July, with over $79 million withdrawn on September 23 alone.
Analysts at IntoTheBlock pointed out that this release suggests a divergence between price movements and investor confidence in Ether’s future prospects.
The mixed signals come as crypto and stock markets react similarly to macroeconomic factors, particularly decisions by the US Federal Reserve. Bitcoin’s correlation with US stocks reached a two-year high, only surpassed in the second quarter of 2022.
Although Ethereum’s network activity and prices have improved, it still struggles to capture the interest of traditional financial investors compared to Bitcoin’s “digital gold” narrative.
This disparity highlights the complex relationship between crypto markets and traditional finance as the industry continues to evolve.
Bullish developments on the sidelines
Despite significant capital outflows, Ethereum has seen significant developments recently.
Financial advisory firm Guggenheim has issued $20 million worth of tokenized commercial paper through AmpFi.Digital, a company that uses Ethereum infrastructure to offer tokenization services to institutional clients.
Additionally, Visa announced a platform to help banks tokenize assets backed by fiat currencies. The Visa Tokenized Asset Platform (VTAP) will also leverage Ethereum technology to create digital representations of real-world assets (RWA).
Notably, Ethereum dominates the market for tokenized US Treasuries. According to data from RWA.xyz, more than $1.5 billion in tokenized U.S. government securities are issued on Ethereum, representing approximately 70% of the sector’s market capitalization.
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