Key Points
- Ethereum’s price is at a critical juncture due to low demand from institutional investors and a significant selloff in the altcoin industry.
- The Ethereum Foundation has been reducing its Ether holdings, coinciding with this decreased institutional demand.
The price of Bitcoin has triggered a significant selloff in the altcoin industry in the past 24 hours. This has resulted in over $698 million of leveraged liquidations.
In the wake of this, the price of Ethereum has also declined by over 7%. It traded at about $3,353 on Wednesday, during the early New York session.
Ethereum’s Price Pattern
In the daily time frame, Ethereum’s price has been forming a potential reversal pattern. This is characterized by a possible head and shoulders (H&S) formation along with a bearish divergence on the Relative Strength Index (RSI).
Moreover, the price of Ether has closed below the 50-day Moving Average (MA) in the past two days. This indicates that the bears are in control.
If further bearish sentiment ensues, Ether’s price might retest the support level around $3,100. This could be before the start of the next bullish cycle.
However, a possible rebound from the current support level could drive Ether’s price towards its all-time high (ATH).
The upcoming second inauguration of US President-elect Donald Trump will significantly impact the crypto industry due to increased volatility.
Ethereum Foundation’s Role
The Ethereum Foundation, a Switzerland-based non-profit organization, has made its first notable sales in 2025. After selling 4,466 ETH for about $12.61 million in 2024, the Ethereum Foundation has continued to reduce its Ether holdings.
According to on-chain data analysis provided by Spot On Chain, the Ethereum Foundation holds digital assets worth about $915 million at the time of this writing.
The Ethereum Foundation mainly holds Ether and Wrapped Ether (WETH) among other digital assets. However, it has focused on selling more ETH.
The ongoing sales by the Ethereum Foundation have coincided with low demand from institutional investors. While the supply of Bitcoin on centralized exchanges has gradually declined in the past few months to multi-year lows, the supply of Ethereum on different CEXes has remained unchanged in the past year despite the approval of US spot Ether ETFs.
On Tuesday, none of the US spot Ether ETFs registered a net cash inflow. Instead, they reported a total net outflow of about $86.79 million. As a result, the cumulative total net inflow of the US spot Ether ETFs stands at about $2.68 billion, and the total net assets at around $12.28 billion.
