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  • bitcoinBitcoin (BTC) $ 42,977.00 0.18%
  • ethereumEthereum (ETH) $ 2,365.53 1.12%
  • tetherTether (USDT) $ 1.00 0.2%
  • bnbBNB (BNB) $ 302.66 0.19%
  • solanaSolana (SOL) $ 95.44 1.28%
  • xrpXRP (XRP) $ 0.501444 0.1%
  • usd-coinUSDC (USDC) $ 0.996294 0.34%
  • staked-etherLido Staked Ether (STETH) $ 2,367.26 1.4%
  • cardanoCardano (ADA) $ 0.481226 2.68%
  • avalanche-2Avalanche (AVAX) $ 34.37 1.19%
  • bitcoinBitcoin (BTC) $ 42,977.00 0.18%
    ethereumEthereum (ETH) $ 2,365.53 1.12%
    tetherTether (USDT) $ 1.00 0.2%
    bnbBNB (BNB) $ 302.66 0.19%
    solanaSolana (SOL) $ 95.44 1.28%
    xrpXRP (XRP) $ 0.501444 0.1%
    usd-coinUSDC (USDC) $ 0.996294 0.34%
    staked-etherLido Staked Ether (STETH) $ 2,367.26 1.4%
    cardanoCardano (ADA) $ 0.481226 2.68%
    avalanche-2Avalanche (AVAX) $ 34.37 1.19%
image-alt-1BTC Dominance: 58.93%
image-alt-2 ETH Dominance: 12.89%
image-alt-3 BTC/ETH Ratio: 26.62%
image-alt-4 Total Market Cap 24h: $2.51T
image-alt-5Volume 24h: $144.96B
image-alt-6 ETH Gas Price: 5.1 Gwei
 

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Ethereum's next move

Ethereum’s next move after DeFi unwind and ETF inflows: what’s coming next?

https://icn.live/wp-content/uploads/2025/07/Ethereums-next-move.mp3
  • by ICN.live
Mariam Al-Yazidi

Ethereum’s next move is at the center of crypto discussions following its explosive breakout and recent cooldown.

The rally wasn’t just speculative hype—it was driven by deep DeFi mechanics unraveling behind the scenes. As stETH depegged and borrowing costs soared, a massive leveraged unwind unfolded, triggering volatility in Ethereum’s price.

Retail euphoria pushed technical indicators to overbought extremes just as institutional players began quietly offloading risk. That shift brought ETH down from its July highs, despite strong ETF inflows and renewed macro tailwinds. Yet, this dip could be more of a consolidation than a crash.

ETH momentum clashed with overheated signals

From early July, Ethereum surged +44%, reclaiming major resistance zones from May and December 2024. However, by July 22, RSI and Stochastic readings hit record overbought levels. These indicators aligned with Ethereum approaching the upper boundary of a multi-year downtrend wedge.

At the same time, open interest in Ethereum futures exploded, rising from $8 billion to $25 billion in just three weeks. While leveraged long positions grew, funding rates also jumped—from 5% to 15%—raising red flags about sustainability. That signaled to many traders that a reversal was coming.

ANOTHER MUST-READ ON ICN.LIVE: $140 million in XRP to exchanges triggers market speculation

Overbought signals flagged Ethereum’s next move before the price correction started

DeFi unwinds, ETF flows, and smart contract growth
The recent turbulence isn’t only about trading signals. Ethereum’s next move is being shaped by quiet on-chain strength. Despite volatility, internal smart contract activity and DeFi usage are rising. Institutional flows are also building—$3 billion entered Ethereum ETFs in just a few weeks.

Treasury firms are mimicking the MicroStrategy model with ETH accumulation. Meanwhile, Asia’s trading desks are driving the current market repricing, fueling ETH dominance gains across the crypto space. Combined with rising on-chain gas efficiency and smart contract deployment, Ethereum is showing underlying structural strength.

Ethereum ETF inflows and smart contract activity support long-term growth

What’s next: consolidation or breakout?
Ethereum’s next move could hinge on broader crypto volatility cycles. Bitcoin remains stuck below $122,000, signaling potential consolidation across the board. Ethereum’s funding rates have now dropped, suggesting less speculative froth. Altcoin momentum is also fading, hinting that ETH might hold firm in a broader cooling phase.

Still, macro signals and ETF flows remain supportive. If gas fees stay low and institutional positioning increases, Ethereum could stage another breakout before year-end. But if DeFi leverage re-accumulates too quickly, another round of forced liquidations could cause deeper pullbacks.

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What triggered Ethereum’s recent price rally?

Ethereum’s breakout began with bullish technical setups, supported by a descending broadening wedge pattern and strong on-chain momentum. The rally accelerated as DeFi leverage unwound, forcing liquidations and shifting price action. Additionally, over $3 billion in ETF inflows added fuel to the move. Retail traders jumped in as the price neared resistance, further pushing Ethereum toward overbought territory. Smart contract activity and on-chain metrics indicated growing network strength. All these factors combined to trigger a +44% rally before technical exhaustion signaled a short-term top.

Why did Ethereum start declining after July 22?

The decline followed multiple warning signs. Ethereum’s price had reached long-term resistance zones while technical indicators such as RSI and Stochastics hit extreme overbought levels. At the same time, leveraged long positions piled up in futures markets, pushing funding rates as high as 15%. These signals suggested a highly speculative rally, likely to cool off. Our July 22 call anticipated this correction, which saw ETH drop about 4% since. This doesn’t confirm a full reversal but points to a necessary consolidation after aggressive gains.

Is Ethereum’s rally driven more by speculation or fundamentals?

It’s a mix of both. While the rally saw heavy speculative flows—reflected in soaring open interest and funding rates—there were also strong fundamental drivers. Smart contract interactions have risen, gas fees remain low, and DeFi usage is recovering. Ethereum ETFs brought in institutional capital, with billions flowing into the ecosystem. Treasury firms are beginning to adopt Ethereum strategies, similar to Bitcoin’s role in corporate treasuries. So while speculative froth existed, the underlying fundamentals remain strong and point to sustainable long-term growth.

What could influence Ethereum’s next move?

Several factors will determine Ethereum’s next move. These include Bitcoin’s price behavior, overall crypto market volatility, macroeconomic conditions, and funding rate trends. On-chain metrics—like smart contract activity and gas usage—also play a crucial role. If ETF inflows continue and DeFi leverage remains balanced, Ethereum could resume its bullish trend. Conversely, a rapid return of speculative excess might lead to another wave of forced liquidations. Institutional participation and regulation, especially from Asia and upcoming laws like the GENIUS Act, will also shape ETH’s future trajectory.

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