Key catalysts driving Ether’s price up today include declining ETH reserves on crypto exchanges and a surge in institutional inflows into Ethereum investment funds.
Ethereum’s native token, Ether ETH $3,831, has risen by over 2% in the last 24 hours to reach $3,865 on June 6. The cryptocurrency’s gains mirror the broader crypto market, whose valuation has jumped by about 1.50% in the same period.
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Among the top catalysts driving Ether’s price up today include depleting ETH reserves across all the crypto exchanges and a surge in institutional inflows toward Ethereum-focused investment funds.
Ether’s HODL sentiment rises
A significant trend among Ethereum traders is the increasing withdrawal of Ether from exchanges, indicating a growing HODLing sentiment.
On-chain data from Glassnode shows that as of June 5, Ether reserves across all exchanges stood at just over 12.59 million ETH, the lowest since July 2016. Historical data reveals a direct correlation between decreasing exchange balances and rising Ether prices.
This suggests investors are holding their ETH for longer or staking it, reducing circulating supply and enhancing price potential. As of June 6, Ether’s annual supply growth rate was -0.71%, per UltraSound Money, since Ethereum introduced the fee burn feature in 2021.
Additionally, Ethereum’s ecosystem has seen nearly ninefold growth in daily active users over the past four years. Bitwise data shows Ethereum, Arbitrum, and Polygon averaged over 250,000 daily active users in Q1 2020, highlighting robust adoption and further supporting price potential.
Institutional investors return to Ethereum funds
Ethereum experienced a second consecutive week of inflows following the U.S. Securities and Exchange Commission’s (SEC) approval of spot-based Ether ETF filings. According to CoinShares’ latest weekly report, these Ether funds attracted $33.5 million in the week ending May 31.
This marks a significant shift in investor sentiment, reversing a 10-week streak of outflows totaling $200 million, and, in turn, boosting ETH’s upside prospects in the days leading up to the potential Ether ETF launch.
Elevated open interest and rising funding rates
Ether’s price gains today coincide with its elevated open interest and funding rates.
Notably, the U.S. SEC’s approval of spot Ether ETF filings followed a sharp rise in the number of outstanding futures contracts—from $14.68 billion on May 21 to $16.97 billion on June 6. At its best during the period, the Ether OI was around $17.09 billion.
Meanwhile, Ether’s funding rates remained positive during the said period, at about 0.336% per week.
The increase in outstanding futures contracts suggests heightened interest and confidence in Ether’s future price appreciation among traders and investors. Positive funding rates further indicate that long positions (bets on the price rising) are dominant, with traders willing to pay a premium to hold these positions.
Combined with institutional inflows and ETF approval, these factors collectively signal robust upward momentum for Ether’s price.
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