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Volatility observed around Ethereum is intensifying as the price faces a potential downward retest of the key $3,500 mark. ETH’s downside trend is taking place amid several bullish developments, such as massive accumulation by treasury companies, raising questions about its price stability and whether institutional demand could diminish.
The foray of the Ethereum treasury strategy has been a historical and remarkable one, with prominent corporations in the crypto and financial landscape heavily buying the leading altcoin in large portions. An accumulation of this magnitude signals growing institutional conviction in ETH’s fundamentals in the long term.
With this high institutional demand, ETH is now being seen beyond a mere asset and as a reliable store of value. However, despite the fact that demand from Treasury organizations has increased significantly, ETH’s price movement has not been able to match this fervor, displaying weak follow-through momentum.
In a recent post on the social media platform X, Johnny, a market expert, outlined a remarkable growth in ETH treasury holdings as companies have bought nearly 4% of the entire ETH supply. It is worth noting that this massive accumulation was carried out within a 3-4 month span, reflecting robust interest in the initiative.
Even with the strong buying spree, the altcoin’s price has persistently failed to experience a surge to the pivotal $5,000 mark. The increasing discrepancy between on-chain accumulation suggests that short-term gains may be limited by profit-taking, network congestion, and macro uncertainty, which has raised eyebrows in the community.
Instead, Ethereum has undergone a sharp pullback from new highs and is heading toward the $3,500 support level, which could determine its next trajectory. As a result of the pullback, the expert highlighted that many ETH treasury companies are now heavily underwater.
While the development is gaining ground in the crypto community, crypto expert and investor Ted Pillows has also thrown his weight behind the matter. Pillows has stated that Ethereum’s next price trajectory hinges on the performance of ETH treasury companies.
According to the expert, ETH treasury companies are still heading downwards. Bitmine Immersion, the leading ETH treasury firm, is currently the sole meaningful buyer, but Pillows is less convinced that it will last for long. When this happens, it is likely to affect its price action in the short term.
With the market still trending downward, Pillows stated that treasury firms may run out of capital soon to purchase more ETH. Until these stocks recover, the expert fails to see the potential for ETH’s price to recover soon.
At the time of writing, ETH was trading at $3,537, demonstrating a 5% decline in the past day. Despite the decrease in ETH’s price, buying pressure seems to be returning, as evidenced by a more than 82% increase within the same period.
