Ethereum traded sideways through much of July, holding within a narrow range even as U.S. investors returned to spot ETH exchange-traded funds. As of Saturday, ETH was changing hands at approximately $1,865, slightly below the monthly peak of $1,975 reached earlier in July. The muted price response to improving fundamental signals underscores a market still searching for direction after a volatile first half of the year.

Spot ETH ETFs Reverse Outflow Trend

American investors rotated back into cryptocurrency ETFs during July. According to data compiled by SoSoValue, spot Ethereum ETFs attracted over $365 million in net inflows during the month — a sharp reversal from the $528 million shed in June and the $540 million lost in May. Spot ETH ETFs launched in the United States in July 2024, meaning these products are still in their first full year of trading, and flow patterns have alternated between accumulation and withdrawal phases as institutional participants calibrate their exposure.

Since their launch last year, spot Ethereum ETFs have accumulated over $11.2 billion in cumulative inflows and now hold $10.2 billion in total assets. BlackRock's ETHA leads with more than $5.4 billion in assets under management, followed by Grayscale's ETH at $1.57 billion and ETHE at $1.4 billion.

The rebound extended to other digital asset funds. Spot Bitcoin ETFs added $172 million in July, while XRP-tracking funds brought in $27.29 million and Solana ETFs garnered $14.6 million.

One factor behind the renewed interest may be a rotation away from artificial intelligence-related equities. During the AI boom, stocks such as Micron, SanDisk, and Seagate had climbed to all-time highs. In July, many of these shares declined, prompting investors to redeploy capital into other assets. Cryptocurrency funds have increasingly been viewed as an alternative risk-on allocation by some institutional investors managing multi-asset portfolios.

BitMine Continues ETH Accumulation

Beyond ETF inflows, Tom Lee's BitMine Immersion sustained its Ethereum purchasing program. The company acquired over 87,000 ETH in July, bringing its total holdings to 5.78 million coins — valued at more than $10.7 billion. BitMine is now approaching its stated target of 6 million ETH, which would represent roughly 5% of Ethereum's total circulating supply held by a single corporate entity.

Staking Demand Keeps Climbing

Ethereum staking metrics also strengthened in July. The network's staking ratio rose to 34.23%, with the total staking market capitalization exceeding $77 billion. The number of staked ETH reached 41 million coins, reflecting continued long-term holder conviction. Because staked ETH is locked and not immediately liquid, the growing staking ratio reduces the effective circulating supply available for trading, a dynamic that interacts with demand-side factors such as ETF inflows.

DeFi and On-Chain Metrics Show Mixed Results

Several key Ethereum network metrics improved during July despite the broader downturn in cryptocurrency markets. Total value locked (TVL) across Ethereum-based decentralized finance protocols climbed to over $40.6 billion, recovering from a June trough of $36 billion.

Among the largest protocols, Lido's TVL rose 20%, while Aave gained 16%, Binance Staked ETH added 16.2%, and Sky increased 6.5%. EigenCloud's TVL grew 14.4% to reach $5 billion. However, not all protocols advanced: Spark's TVL fell 35% and Ethena's declined 20%.

Network activity also picked up. Ethereum processed over 72 million transactions in July, the highest monthly figure since April, indicating sustained on-chain utility.

Despite these improvements, certain metrics pointed to headwinds. The volume of stablecoins on the Ethereum network dropped sharply during the month, and total transaction fees fell to just $8.3 million. Lower fee revenue also means fewer ETH tokens are burned under Ethereum's EIP-1559 mechanism, which removes a portion of each transaction fee from circulation. When burn rates fall below new issuance, the network's supply can shift from deflationary to inflationary.

Technical Analysis: August Outlook

On the daily chart, ETH rebounded from its year-to-date low of $1,509 in June to reach $1,975 in July, forming a double-bottom reversal pattern. The price has since moved above the key resistance and neckline level at $1,840 and has retested that zone, creating a break-and-retest pattern often associated with trend continuation.

ETH is currently trading slightly above its 25-day Exponential Moving Average (EMA). Based on these technical signals, the coin could push toward the $2,000 level or higher in August. Conversely, a decline below the $1,700 support level would weaken the bullish case. August trading will also reveal whether ETF inflows and staking growth can sustain their July momentum through what is seasonally a lower-liquidity period for digital asset markets.

Source: The Market Periodical