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- Ethereum (ETH) has been predicted to extend its rally to $5,200 as institutional demand overpowers retail liquidation.
- Ethereum Foundation recently sold 4,095.18 ETH for $18 million, however, this had no bearish impact on the ETH price.
Ethereum (ETH) is once again dominating the charts, leading the broad market rally with a 24-hour surge of 7% and a weekly surge of 27% to trade at $4,627. This level represents a four-year high and is almost 6% away from its all-time high price of $4,891.
What Could be the Reason for the Rally?
Our research shows that this rally is largely driven by institutional demand as retail investors have continued to sell.
As detailed in our recent news story, the amount of ETH held by Treasury firms is around $11.77 billion. BitMine Immersion Technologies alone holds 833,000 ETH while The Ether Machine holds $1.34 billion worth of ETH. On August 12, Bitmine Technologies disclosed that it would raise $25 billion from stock sales to accumulate more ETH.
Not just them. SharpLink also holds about $2 billion in ETH exposure after recently offering up to $1 billion in common stocks to increase its holdings, according to other reports. As highlighted in our earlier discussion, an unknown entity is also reported to have bought $1 billion worth of ETH.
Apart from this, there is a direct correlation between the current rally and the ETH ETF inflow. Data suggests that a net inflow of $500 million was recorded on Tuesday, with $1 billion recorded the previous day. Fascinatingly, BlackRock’s ETHA dominates in this area with its inflow surpassing $10.5 billion.
Generally, crypto investment products also saw net inflows of $572 million last week, as explained in our recent publication. Meanwhile, Ethereum co-founder Vitalik Buterin cautions that excessive leverage by these Treasury firms could be the downfall of the project, according to our recent update.
Confirming this strong institutional demand, data has also disclosed that ETFs purchased 52.4 times the amount of ETH newly issued. While 2,428 ETH is issued daily, 127,403 ETH is reported to be accumulated by ETFs.
Ethereum (ETH) Foundation Recent Sales
Amidst the backdrop of this rally, the Ethereum Foundation just sold 4,095.18 ETH for $18.75 million in DAI at an average price of $4,578 per coin. Prior to this, the Foundation had sold 1,694.8 ETH ($7.72 million) and another 1,100 ETH ($5.06 million) at $4,602.
Apart from the Ethereum Foundation, another entity called “7 Siblings” also exchanged almost 20,000 ETH for $90.4 million in USDC. Fascinatingly, the market did not even flinch. According to analyst Benjamin Cowen, this seems to be more like an Ethereum season than an altseason.
ALTs are now down 50% against ETH since April. As I said below, this was ETH season, not ALT season. As long as ETH/BTC goes up, so too will ALT/BTC pairs. But ALT/ETH pairs will likely bleed for about 1-2 more weeks before they get a relief bounce.
Analyst Ali Martinez has also disclosed that ETH is not slowing down anytime soon, as the existing bullish momentum could continue till the price reaches $5,241.
