Ethereum rally stalls near $1,720 as exchange inventory surges

Ethereum rose roughly 10% to near $1,720 since July began, but on-chain data shows the rally is losing momentum as exchange inventory climbs and buyer conviction weakens.

"Exchange inflows have picked up meaningfully over the past 72 hours, which historically precedes distribution phases," Jason Wu, on-chain analyst at Edgen, said. "The spot market is seeing less aggressive bid support at current levels compared with the initial bounce off $1,560."

ETH on Ethereum traded at $1,718.42 as of 14:30 UTC, up from a June 30 close of $1,560 — the lowest monthly settlement since November 2025, according to CoinGecko data. The 21.9% decline in June mirrored a broader macro-driven correction that saw Bitcoin fall 20.5% to $58,500, with spot Bitcoin ETFs recording $4.5 billion in net outflows, the largest monthly withdrawal since the products launched, per CoinEx Research.

The rally off the June low has been driven largely by short-covering and spot buying near the $1,500 support zone, but on-chain metrics suggest the bid is thinning. Exchange netflow turned positive over the past week, with more ETH moving onto trading platforms than being withdrawn — a pattern that typically precedes increased sell pressure. Combined USDT and USDC supply contracted by $5.2 billion in June, the second-largest monthly decline this year, indicating that fresh stablecoin capital has not yet rotated back into altcoin markets.

The transmission chain from macro to on-chain to price is clear. The Federal Reserve's hawkish dot plot in June pushed the Dollar Index to its highest level in more than a year, draining risk appetite across digital assets. While ETH has recovered from its June lows, the absence of a corresponding expansion in stablecoin liquidity or ETF inflows — Hyperliquid spot ETFs attracted $161 million in June, but no equivalent product exists for ETH — leaves the rally on fragile footing.

If ETH fails to hold above $1,650 in the coming sessions, the next support sits at $1,500, the level that was tested multiple times in late June. A break below that floor would open the path toward $1,350, the August 2025 low. On the upside, ETH needs a clean close above $1,800 — the level where multiple rejections accumulated in May — to confirm a structural reversal. The CLARITY Act, which faces a four-week Senate deadline before the August 7 recess, could provide a regulatory catalyst if passed, but the calendar math is tight and the ethics standoff blocking Democratic votes remains unresolved.

This article is for informational purposes only and does not constitute investment advice.