Ethereum extends rally on ETF Inflows and Blob upgrade, but RSI flags caution

• Ethereum ETF inflows and whale accumulation boost the ETH price rally.
• The BPO hard fork has raised the blob limit, improving Ethereum scalability.
• An overbought RSI signals possible short-term volatility despite strong.

Ethereum has continued its upward price momentum, extending a strong weekly rally even as the broader crypto market slipped slightly.

At press time, Ethereum (ETH) was up 1.13% over the past 24 hours, building on a robust 7-day gain of roughly 9.60%.

These price gains come despite a modest 0.44% decline in the overall crypto market, underscoring Ethereum’s relative strength.

The ETH bullish momentum is underpinned by a combination of institutional demand, improving Ethereum scalability, and favourable on-chain dynamics.

However, technical indicators suggest that caution may be warranted in the near term with the RSI currently in the overbought region.

ETF inflows reinforce Ethereum’s institutional narrative

One of the key catalysts for the Ethereum rally has been sustained inflows into spot Ethereum ETFs.

Data from Coinglass shows that spot Ethereum ETFs attracted approximately $114.7 million in net inflows on January 6, 2026.

These inflows occurred even as some legacy products recorded outflows, suggesting fresh institutional capital is entering the market.

For investors, ETF demand signals growing confidence in Ethereum as a long-term, regulated asset.

It also helps absorb potential selling pressure, providing price stability during periods of broader market uncertainty.

Market participants increasingly view ETF flows as a barometer of institutional sentiment, similar to how YCharts data is often used to track macro trends across traditional assets.

Blob Parameter-Only hard fork boosts Ethereum scalability

Beyond demand-side factors, Ethereum’s fundamentals have improved following recent network upgrades.

The Fusaka upgrade, activated in December 2025, introduced meaningful enhancements to Ethereum scalability.

Central to this progress is the Blob Parameter-Only hard fork, commonly referred to as the BPO hard fork.

The BPO hard fork, which went live on Wednesday at 1:01:11 UTC, raised the blob limit per block, increasing the amount of data that can be processed efficiently.

By expanding blob capacity, Ethereum reduced data costs for Layer-2 rollups without overburdening the base layer.

This design aligns with Ethereum’s long-term rollup-centric roadmap championed by Ethereum co-founder Vitalik Buterin.

Lower Layer-2 fees have already translated into stronger network usage, with daily transactions reaching multi-month highs.

The BPO upgrade also improves conditions for advanced scaling solutions, including zero-knowledge Ethereum virtual machines (zkEVMs).

These zkEVMs rely heavily on efficient data availability, making the higher blob limit a structural advantage.

Developers view BPO as a stepping stone toward even larger upgrades, including the planned Glamsterdam hard fork, which is expected later in 2026.

The Glamsterdam hard fork is expected to further enhance throughput and computational efficiency across the Ethereum ecosystem.

Together, these changes strengthen Ethereum’s value proposition as a scalable settlement layer for decentralised applications.

Whale accumulation supports price, but momentum overheats

On-chain data adds another layer of support to Ethereum’s bullish narrative.

Large holders, often referred to as whales, have accumulated more than 3.62 million ETH over the past month, according to CryptoQuant data.

At the same time, Ethereum exchange reserves have fallen to levels not seen in nearly nine years.

Source: CryptoQuant

Reduced exchange balances typically imply lower immediate selling pressure.

This pattern suggests that long-term holders are positioning for higher prices rather than short-term exits.

However, momentum indicators are beginning to flash warning signs.

Ethereum’s relative strength index (RSI) has climbed to around 64, placing it near the overbought territory.

Historically, such elevated RSI readings can precede short-term pullbacks or periods of consolidation.

Upcoming derivatives events, including near-term options expiries, could amplify volatility.

Ethereum price forecast

Ethereum’s medium- to long-term outlook remains constructive, supported by ETF inflows, improving Ethereum scalability, and a declining liquid supply.

The Blob Parameter-Only hard fork and higher blob limit strengthen the network’s technical foundation and support Layer-2 growth.

Continued progress toward upgrades like the Glamsterdam hard fork keeps Ethereum aligned with Vitalik Buterin’s long-term vision.

Currently, the immediate resistance for ETH lies at the 100-day EMA at $3,307, which, if broken, could open the door for further gains towards the next resistance at the 200-day EMA at $3,352.

Ethereum price analysis | Source: TradingView

In the short term, however, the elevated RSI suggests traders should be prepared for potential price fluctuations that could pull Ethereum down to the support at the 50-day EMA at $3,132.

But if ETF inflows remain strong and on-chain accumulation persists, any pullback may be shallow.

Overall, Ethereum appears well-positioned for further gains, but near-term caution is warranted as momentum cools.

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