Ethereum Price Rebounds at $3,500 as ETFs Continue to Hoard ETH and Supply Dries Up

Ethereum Price (ETH-USD) Holds Steady Near $3,500 Amid Market Turbulence and ETF Flows

Institutional Demand Anchors ETH-USD Near Critical Levels

Ethereum price slumped close to $3,500 after shedding nearly 10% last week, yet spot ETF inflows of $154 million demonstrated unwavering institutional interest. Despite this week’s weakness—from $3,946 to a trough of $3,392—US spot ETH-USD ETFs have enjoyed 12 consecutive weeks of net positive entries. BlackRock’s ETHA alone gathered over $4 billion in July, signaling that long-term buyers remain deeply engaged even as retail sentiment cools.

Technical Landscape Frames $3,500 as Make-or-Break Zone

Ethereum’s daily chart reveals a golden cross of the 100-day moving average above the 200-day, yet the breach below the $3,730 support and retest of $3,500 mark a moment of truth. RSI cooled from 78 to 56, carving out room for renewed upside pressure. Holding above the 78.6% Fibonacci retracement at $3,392 preserves the bullish structure. A close above $3,730 would open the path back toward $4,000 and higher targets at $4,100 and $4,400–$4,500. Conversely, a drop below $3,500 risks a slide toward the 50-day EMA at $3,170.

On-Chain Dynamics Signal Shrinking Supply

The Ethereum Exchange Supply Ratio, now at a multi-year low of 0.13, underscores that fewer coins are available on centralized venues. With less ETH-USD parked on exchanges, market depth thins, and even moderate buy pressure can cascade into sharper rallies. This supply contraction—driven by staking, DeFi lock-ups, and long-term accumulation—remains one of the most potent bullish undercurrents beneath Ethereum’s consolidation.

Macro Headwinds and Tariff-Driven Volatility

Risk-off sentiment spiked after President Trump’s fresh tariffs on 69 nations and the Fed’s hawkish messaging, freezing hopes of a September rate cut. That confluence of political and monetary uncertainty knocked ETH-USD down nearly 10% in seven days. Yet even as USDT and USDC whales realized $40 million in profits late July, institutional buyers continued to accumulate, treating the pullback as a strategic entry point.

DeFi Revival and Smart Money Positioning

July’s 55% rally, from $2,466 to $3,821, was fueled by DeFi’s resurgence—total value locked across Ethereum protocols surged past $140 billion, with Ethereum DeFi accounting for 60% of that figure. NFT sales climbed 14% week-over-week, reinforcing on-chain activity. CryptoQuant’s metrics show Tether and WBTC whales cutting exposure after profits, while long-term addresses added to their balances, signaling smart-money conviction ahead of the next leg.

Analyst Targets: $4,000 Next, $7,000–$8,000 On Deck

Crypto strategist Marcus Corvinus highlights a hidden bullish divergence in RSI, where lower RSI lows coincide with higher price lows—classic setup for a parabolic breakout. His forecast of $7,000–$8,000 remains intact, contingent on ETH holding current support. BitMEX co-founder Arthur Hayes, however, cautions of a deeper “psychological” retest at $3,000 before the next uptrend, tying liquidity risks to weak job data and trade tensions.

Trade Recommendation: Buy on Dips to $3,350, Add Above $3,730

Technical and on-chain indicators align with a buy-on-dip strategy into the $3,350–$3,500 zone, where the 78.6% Fib and golden cross confluence provide robust defense. Scaling back in above $3,730—once reclaimed—offers asymmetric upside toward $4,000 and beyond. Given the ETF inflows, shrinking exchange supply, and persistent DeFi growth, ETH-USD appears primed for the next breakout.

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