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    Ethereum Treasury Demand Drops 80% as ETH Price Surges Back to $3,000

    Ethan CarterBy No Comments4 Mins Read
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    Ether’s (ETH) price is currently at $3,077, reflecting a rise of 17% from its recent lows of $2,620 recorded on Nov. 21. Nevertheless, a decrease in treasury buying and existing overhead resistance have hindered a sustained move towards $4,000.

    Key takeaways:

    • Ether treasury demand has plummeted by 80%, raising alarms regarding their viability.

    • Overcoming the resistance at $3,200 is vital for confirming a recovery.

    • Ether’s falling wedge breakout targets $4,150 ETH if the key support levels hold.

    Ethereum treasuries have fallen by 80%

    Ether has experienced a sharp decline in demand from corporate treasury entities that previously accumulated ETH as part of the “DAT” trend.

    According to data from Bitwise, digital asset treasury (DAT) firms acquired only 370,000 ETH in November, a significant drop of 81% from August’s high of 1.97 million ETH.

    Related: Digital asset treasury boom stalls as flows decline to $1.3B and stocks falter

    Bitwise’s Senior Research Associate, Max Shannon, cautions that the structural demand for Ether may vanish if treasury buying continues to drop while supply remains steady.

    “As more alternatives arise, the same pool of capital cannot sustain demand.”

    This decline is not merely a slowdown; it points to a structural deterioration caused by diminishing mNAV levels and shrinking purchasing power among smaller companies.

    Additional data from Capriole Investments indicates that daily institutional buying, incorporating both DATs and ETFs, has decreased from a high of 121,827 ETH on Aug. 15. In fact, they are now offloading at a pace of 5,520 ETH daily. 

    019ae4a1 1391 7141 88a8 61ba246a7f11
    Ethereum: Daily rate of institutional buying. Source: Capriole Investments

    Securing capital is becoming increasingly challenging, leaving only a few prominent players active. One of these is Bitmine, led by Wall Street strategist Tom Lee, which continues to increase its ETH holdings; however, both monthly and weekly volumes have dropped, according to CryptoQuant analyst Maartunn. 

    While treasury purchases still surpass Ethereum’s monthly supply of approximately 80,000 ETH, the reducing pool of active buyers suggests that the DAT model is faltering.

    As Cointelegraph previously reported, Ether treasury firms are facing millions in unrealized losses, raising questions about their long-term sustainability.

    Ether confronts resistance above $3,200

    The recent rebound in ETH price has returned it to a crucial support zone around $3,080, where both the 50-week and 100-week SMAs converge, as per data from Cointelegraph Markets Pro and TradingView.

    A daily candlestick close beyond this point would indicate a bullish sentiment where buyers regain control.

    019ae4a1 1a14 7276 8837 592964217ab5
    ETH/USD four-hour chart. Source: Cointelegraph/TradingView

    If this level is sustained, “then we’re anticipating upward movement,” MN Capital founder Michael van de Poppe noted in a recent X post, stating:

    “On the upside, $3,000-3,100 remains a key resistance zone to overcome.”

    This resistance level coincides with the 200-period SMA, which has been constraining the price since Oct. 28. 

    This is the point where investors acquired approximately 5.1 million ETH, based on Glassnode’s cost basis distribution heatmap. 

    019ae4a1 228f 797b a684 56cac0a29004
    Ethereum: Cost basis distribution heatmap. Source: Glassnode

    As Cointelegraph reported, a close above the 20-day EMA at $3,100 would indicate that the selling pressure is diminishing, paving the way for a rally toward the 50-day SMA around $3,500.

    Ether’s falling wedge breakout targets $4,150

    The daily chart indicates that the ETH/USD pair has breached the upper trendline of a falling wedge pattern at $3,000.

    A daily close above this threshold would validate the breakout, setting the stage for Ether’s ascent toward the wedge’s target at $4,150, which represents a 36% increase from the current price.

    019ae4a1 28dc 7b4b 9939 daae50af0274
    ETH/USD daily chart. Source: Coitelegraph/TradingView

    This target aligns with ETH price forecasts from various analysts, as valuation models suggest that the altcoin is considerably “undervalued.”

    This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.