Bitcoin-to-Ethereum swaps rise amid surging risk appetite - What now?

Demand for ETH recovers

With Ethereum seeing a shift in market sentiment, the demand for the altcoin has surged significantly.

Inasmuch, Ethereums Fund Market Premium has held positive for two consecutive days, for the first time in almost two weeks.

Source: CryptoQuant

Usually, when the market premium holds positive, it suggests that investors have turned to aggressive accumulation of ETH through funds.

Thus, buyers are willing to pay more than the actual value of ETH, a clear sign of institutional-style bullishness.

As a result of this aggressive accumulation, Ethereums Exchange Netflow has remained negative for five consecutive days.

In fact, at press time, the altcoins Netflow was -32k ETH, indicating withdrawals rather than deposits, a clear sign of aggressive spot accumulation.

Source: CryptoQuant

Historically, higher exchange outflows have accelerated upward momentum by raising scarcity, often a prelude to higher prices.

Is demand adequate to sustain a rebound？

While demand for ETH from whales and funds has recovered, the market remains structurally bearish. As a result, demand has become inadequate to address the market gap.

In fact, Ethereums downward momentum has continued to strengthen. The Directional Movement Index (DMI) dipped into oversold territory, entering a negative zone at -3, indicating bearish dominance.

Source: TradingView

Such market conditions leave ETH in a bearish position and could lead to further losses. The continuation of these market conditions could see ETH lose $3k support and drop to $2.8k.

However, if buyers hold the accumulation spree, ETH could close above EMA20 at $3121 and target $EMA50 at $3288, signaling a trend shift.