$ETH eyes $3,470 as ETF inflows show returning demand, derivatives remain muted.

Traditional investors are playing a key role in Ethereum's (ETH) recent recovery after weeks on the sidelines.

Ethereum exchange-traded funds (ETFs) drew in $177.6 million on Tuesday, marking a second consecutive day of positive performance and their highest inflow since October 28, according to SoSoValue data.

The products have been hinting at a resumption of TradFi interest after breaking an outflow trend on November 21. Notably, the day also marked a halt to ETH's six-week price decline.

Despite the recent recovery, market confidence isn't yet strong considering the mix of outflows seen last week. This is also evident in Ethereum's average funding rates across all exchanges.