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Expectations from Ethereum in June
After Bitcoin surged to a new record high in May, the leading altcoin Ethereum has seen a new increase in trading activity, with the price of ETH also reaching a multi-month high of $2,789 on May 29.
However, as the overall market cooled down over the past two weeks, the price action of ETH has tightened, consolidating within a narrow range. Nevertheless, market analysts remain optimistic about the outlook for ETH in June.
The outlook for Ethereum turns optimistic as institutional ETF inflows surge
In an interview, Temujin Louie, CEO of Wanchain, stated that the outlook for ETH this month is "increasingly optimistic," driven by a continuous influx of capital into Ethereum ETF funds and the stability of the network.
"The continued investment in Ethereum ETF funds shows that institutional interest remains strong, reinforcing the credibility of ETH as a long-term asset. The recent Pectra upgrade is also a success for the network, and internal disputes within the Ethereum Foundation have subsided; investor confidence in both Ethereum and ETH is being restored."
Additionally, Dominick John, an analyst at Kronos Research, confirmed this optimism, highlighting the impact of ETF capital flows on ETH's price action.
"The ETH ETF has helped shape recent price action, signaling a strong increase in institutional investment interest, boosting market liquidity while reducing volatility. This wave of demand, combined with strong fundamentals such as the strength of stablecoins, solid on-chain signals, tightening supply, and sustained interest."
According to SosoValue, ETH ETF funds have seen an increase in weekly inflows since May 16. This week, net inflows reached 286 million USD, indicating the confidence of institutional investors.
Moreover, the positive funding rate of ETH further supports this bullish outlook. As of now, the funding rate of ETH is at 0.0068%, reflecting the confidence from leveraged traders who are willing to pay a premium to maintain their Long positions.
The funding rate of ETH is positive, in line with the flow of capital from institutions into ETH ETF funds. This confirms that market participants are positioning for the potential growth surge that may occur in June.
Warning Signal
Despite the potential for price increases in June, analysts warn that macroeconomic conditions may still pose risks to the short-term performance of ETH.
Louie emphasized that, while the fundamentals of ETH remain strong, the top altcoin "is still vulnerable to macroeconomic conditions."
"Despite the bullish momentum, the crypto market is generally still speculative, reacting strongly to inflation data, interest rate expectations, changes in the U.S. Federal Reserve (Fed) policy, and other external factors. Although the fundamentals of Ethereum remain strong, short-term price trends can quickly be reversed by unfavorable macroeconomic trends."
John also mentioned that the upcoming FOMC meeting of the Federal Reserve on June 17 is a noteworthy event.
"The broader macro trends, especially inflation data and the Fed's interest rate policy, continue to play a key role in price action. A moderate shift could strengthen ETH's breakout, especially with the continuous influx of capital into ETF funds. However, a hawkish stance could cause significant volatility, even as stablecoin dominance, staking yields, and Layer-2 growth signal underlying strength in the ecosystem."
As ETH enters June with optimism, investors should closely monitor macroeconomic signals, as they have the potential to shape the price trajectory of ETH in the coming weeks.
Vincent