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    Ethereum Treasury Demand Plummets 80% as ETH Price Recovers to $3K

    Ethan CarterBy No Comments4 Mins Read
    Ethereum Treasury Demand Plummets 80% as ETH Price Recovers to $3K

    Ether’s (ETH) price is currently trading at $3,077, reflecting a 17% increase from its local lows of $2,620 on Nov. 21. Nonetheless, decreased treasury buying and overhead resistance have hindered a sustained move towards $4,000.

    Key takeaways:

    • Demand for Ether among treasuries has plummeted by 80%, raising concerns about its sustainability.

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

    • The breakout from Ether’s falling wedge pattern targets $4,150 if key support levels are maintained.

    Ethereum treasuries have declined by 80%

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

    According to Bitwise data, digital asset treasury (DAT) companies bought only 370,000 ETH in November, a decrease of 81% from the peak of 1.97 million ETH in August.

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

    Bitwise’s Senior Research Associate, Max Shannon, cautions that the structural demand for Ether may evaporate if treasury buying persists in its decline while the supply remains stable.

    “As more alternatives enter the market, the limited pool of capital cannot sustain the demand.”

    This downturn indicates a structural decline, driven by decreasing mNAV levels and a loss of purchasing power among smaller enterprises.

    Further data from Capriole Investments shows that daily institutional buying, covering both DATs and ETFs, has fallen from a peak of 121,827 ETH on August 15. Currently, they are selling at a rate of 5,520 ETH daily. 

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

    Raising capital has become challenging, leaving only a few major players active. One of them is Bitmine, led by Wall Street strategist Tom Lee, which continues to accumulate ETH; however, monthly and weekly volumes have decreased, according to CryptoQuant analyst Maartunn.

    Although treasury purchases still exceed Ethereum’s monthly supply of about 80,000 ETH, the dwindling pool of active buyers indicates that the DAT model is in collapse.

    As reported by Cointelegraph, Ether treasury companies are holding millions in unrealized losses, raising questions about their viability.

    Ether encounters resistance above $3,200

    The recent surge in ETH price has brought it back to a key support area around $3,080, where the 50-week and 100-week SMAs converge, based on data from Cointelegraph Markets Pro and TradingView.

    A daily candlestick close above this level would indicate a bullish sign that buyers have regained control. 

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

    If this level is maintained, “then we look 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 to break through.”

    This resistance area overlaps with the 200-period SMA, which has kept the price subdued since October 28. 

    This is where investors acquired approximately 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 noted by Cointelegraph, a close above the 20-day EMA at $3,100 would suggest diminishing selling pressure, paving the way for a rise toward the 50-day SMA near $3,500.

    Ether’s falling wedge breakout targeting $4,150

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

    A daily close above this threshold would confirm the breakout, creating a pathway for Ether to target the wedge’s objective at $4,150, which represents a 36% increase from the current price.

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

    This upside target aligns with the ETH price forecasts made by various analysts, as valuation models indicate that the altcoin is considerably “undervalued.”