Ether rises 10% following Jackson Hole, ETF holdings exceed 6.4M ETH

Ether Surges 10% After Powell’s Jackson Hole Address

Ether broke through the $4,350 resistance on Thursday, approaching a supply zone ranging from $4,550 to $4,650. This surge was spurred by Federal Reserve Chairman Jerome Powell’s hints at possible interest rate cuts in September, which resonated across various risky assets.

Powell’s statements indicated a shift in policy focus, suggesting that potential adjustments could stem from the current balance of risks. He pointed to negative employment risks and a contracting labor supply in relation to demand, along with moves away from the Fed’s flexible average inflation targeting. Notably, he cautioned that expectations for stable inflation aren’t “natural.”

This speech acted as a catalyst for Ether’s price movement, with ETH seeing a 7% return in the hour following Powell’s comments. The closing above the $4,350 threshold marks a significant breakthrough, considering that level had been tested multiple times earlier in the week. The bullish trend also aligns with patterns seen before the speech.

With upward momentum, ETH could potentially reach highs exceeding $4,800, although sellers may reassert some pressure.

Related: BlackRock Sees $287 Million Inflow into Spot ETH ETF Following Four-Day Outflow Streak

ETH Emerges as a New Favorite in Tradfi

Ether (ETH) is solidifying its position as a popular choice within the Treasury Ministry of Finance, propelled by strong inflows in spot ETFs. July saw a record net inflow of $5.43 billion, followed by another $2.45 billion in August, marking a peak in ETF demand.

According to data from Cryptoquant, ETH holdings in ETFs rose to 6.42 million from 415 million on July 8 to August 21, reflecting a remarkable increase of 2.27 million ETH over just six weeks—an approximate growth of 58%. This signals a period of vigorous accumulation since the ETF’s introduction.

The rapid inflow into the ETF has created what some describe as a “structural demand shock.” Since tokens are retained in the ETF structure, they’re taken out of circulation within the spot exchange, meaning that transaction sizes will have a more pronounced effect on price changes, thus making ETH more volatile with ETF rebalancing and redemptions.

However, continued interest in ETFs could support sustained buying under the market, pushing realized prices higher and stabilizing volatility.

On a positive note, analyst Ted Pillow pointed out that Ether whale activity is on the rise. The number of addresses holding over 10,000 ETH has jumped by over 200 since July, aligning with the broader accumulation narrative. Currently, ETF custodians and strategic finance companies together hold approximately 10.52 million ETH.

Related: EU Investigates Ethereum and Solana for Digital Euro Initiative: FT