Institutional funds start flowing into Ether, ETH reclaims $3000 with 7% surge

• Ethereum investment products from Europe contributed to the maximum institutional inflows last week.
• Post today’s surge, the ETH price is eyeing a further rally to $3,500 and above.

Despite the U.S. equity market staying under pressure on Monday, the crypto market has registered a healthy bounceback. As of press time, the world’s second-largest cryptocurrency Ethereum (ETH) is up 7.27 percent and is trading above its crucial resistance of $3,000.

This healthy bounce in the ETH price comes as institutional investors start accumulating the cryptocurrency. After nine consecutive weeks of outflows, the Ethereum investment products have witnessed inflows for the first time.

As per data from CoinShares, the inflows for the last week stood at $21 million. As of the week ending February 11, this amount constitutes 28 percent of the total inflow in the crypto investment products. The interesting thing is that the Ethereum investment products from Europe dominated the inflows whereas the ETH products from the U.S. witnessed net outflows.

This suggested a major trend reversal after nine weeks of continuous outflows. The total institutional inflow in the crypto space for the past week was $209 million. However, this was only a fraction of the inflows in crypto-asset funds during Q4, 2021. However, Bitcoin still occupied the lion’s share with $25 million inflows last week.

Professional investors in crypto continued to remain on the sidelines after a strong volatility this year. With the U.S. inflation hitting 7.5 percent for the month of January 2021, the Federal Reserve has been taking pro-active measures. Analysts expect the Fed to raise interest rates faster than expected. As a result, money has been moving out of equity and crypto to other risk-off assets.

Ethereum transaction fee on a decline

One of the good things with Ethereum (ETH) is that the transaction fee is on a decline. Last Sunday, on-chain data provider Santiment reported:

With #Ethereum dropping back below $3,000, the demand to make $ETH transactions has stayed relatively low. And with this, transaction fees are now officially at their lowest level since July 28, 2021. Low fees typically maximize the chances of a bounce.

Well, this is what actually happened today. The Ethereum price has seen a healthy bounce back today. Ethereum looks strong on the technical charts as well and we can Ethereum to surge past $3,585 levels.

For the year 2022, all eyes are currently on the development of Ethereum 2.0. Ethereum co-founder Vitallik Buterin has addressed some key questions that confirm that The Merge will take place in 2022.

Earlier this month, Vitalik Buterin shared the details of the key updates happening to the Ethereum blockchain network. To improve the network functionality, the Ethereum network will undergo five “urges”.

The first is The Merge and the second is The Surge, which revolves around sharding implementation. The third is the Verge, which will ease validating the Ethereum chain and running a node. Fourth is The Purge where unnecessary historical things will be deleted to simplify the protocol. Last is The Splurge which involves a number of upgrades such as account abstraction and EVM upgrades.