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

    Ethan CarterBy No Comments4 Mins Read
    Ethereum Treasury Demand Drops 80% as ETH Price Surges Back to $3K

    Ether’s (ETH) price is at $3,077, reflecting a 17% increase from its recent low of $2,620 recorded on Nov. 21. Nonetheless, diminished treasury purchases and existing overhead resistance have hindered a consistent recovery toward $4,000.

    Key takeaways:

    • Ether treasury demand has plummeted by 80%, causing concerns about their long-term viability.

    • Surpassing the resistance at $3,200 is essential to validate the recovery.

    • Ether’s falling wedge breakout could target $4,150, provided key support levels remain intact.

    Ethereum treasuries have collapsed by 80%

    Ether has experienced a significant drop in interest from corporate treasury entities that had previously accumulated ETH as part of the “DAT” trend.

    According to Bitwise, digital asset treasury (DAT) companies purchased merely 370,000 ETH in November, reflecting an 81% decline from the August peak of 1.97 million ETH.

    Related: Digital asset treasury boom stalls as flows decrease to $1.3B and stocks drop

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

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

    This decline signifies not merely a slowdown but a fundamental reduction driven by decreasing mNAV levels and the eroding purchasing power among smaller firms.

    Further data from Capriole Investments indicates that daily institutional buying, encompassing both DATs and ETFs, has plummeted from a peak of 121,827 ETH on Aug. 15. Notably, they are currently selling at a rate 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, limiting active participation to a few large players. One such entity, Bitmine, led by Wall Street strategist Tom Lee, continues to acquire ETH; however, both monthly and weekly volumes have diminished, as noted by CryptoQuant analyst Maartunn.

    Though treasury acquisitions still exceed Ethereum’s monthly supply of roughly 80,000 ETH, the shrinking pool of active buyers suggests that the DAT model is failing.

    As reported by Cointelegraph, Ether treasury companies are facing millions in unrealized losses, raising alarms about their sustainability.

    Ether faces resistance above $3,200

    The recent recovery in ETH price has allowed it to reclaim a key support zone around $3,080, where the 50-week and 100-week SMAs appear to converge, according to Cointelegraph Markets Pro data and TradingView.

    A daily candlestick closure above this level would signify a bullish indication that buyers have regained control.

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

    If this level sustains, “then we’re looking forward to an upside,” MN Capital founder Michael van de Poppe stated in a recent X post, adding:

    “On the upside, $3,000-3,100 remains a critical resistance zone that needs breaking.”

    This resistance region coincides with the 200-period SMA, which has restrained the price since Oct. 28.

    This is where investors accumulated around 5.1 million ETH, as indicated by Glassnode’s cost basis distribution heatmap.

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

    As Cointelegraph noted, a close above the 20-day EMA at $3,100 would imply that selling pressure is waning, paving the way for a rise toward the 50-day SMA around $3,500.

    Ether’s falling wedge breakout targets $4,150

    The daily chart indicates the ETH/USD pair is breaking above the upper trendline of a falling wedge formation at $3,000.

    A daily closure above this level would confirm the breakout, setting the path for Ether to rise towards the wedge’s target at $4,150, which represents a 36% increase from the current valuation.

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

    This upside objective aligns with the ETH price forecasts made by several analysts, as valuation models imply 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.