Important takeouts:
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If the ether price reaches $4,350, then a position above $1 billion (bearish) faces liquidation risk.
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Bitmine Immersion has expanded its holdings to $10.6 billion, covering 5% of its total ether supply.
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The Ether ETF has influx of $547 million, strengthening institutional demand amid declining on-chain activity.
Ether (ETH) struggled to hold more than $4,200 on Tuesday despite strong demand for the Ethereum Exchange-Traded Funds (ETF) the day before. The weaker on-chain activity likely put a strain on investors’ sentiment, but companies continue to add ETH to their reserves as part of their long-term strategy.
Traders are now questioning whether ETH can regain the $4,800 level it was last seen on September 13th.
On Monday, Spot Ethereum Products recorded a net inflow of $547 million, reversing last week’s trends, indicating a potential change in investor confidence. Traders were worried that demand for digital assets could be eased if the US faces government shutdowns or if expectations for the artificial intelligence sector faded.
These concerns were alleviated as partial federal agency closures were limited, and thus the persistent effect was limited, according to Yahoo Finance. At the same time, after Openai announced a new partnership with Nvidia (NVDA) and Oracle (ORCL), interest in technology inventory has improved, further supporting a broader risk appetite.
As investors reduce risk aversion, cryptocurrency demand resurfaced on Monday, boosted by the purchase of 234,800 ETH Bitmine Immersion (BMNR) as part of its financial strategy. The company currently owns more than $10.6 billion in ether, with Chairman Tomley reaffirming its long-term goal of securing 5% of its total ETH supply.
Ether also found support from a new partnership between Ethereum Ecosystem Developers Consensys and Bank Interbank messaging network Swift. Over 30 financial institutions will work together on prototypes on cross-border payments aimed at improving interoperability of tokenized assets.
Although ETH itself is unlikely to see the direct benefits of the project, Swift does not move the money and instead provides the infrastructure for institutions to coordinate settlements, so Consensy’s involvement has helped to increase reliability and keep ETH at over $4,100.
Ethereum Network activity decreases, ETH puts negative pressure on
Despite the continued accumulation by institutional players, ether traders remain cautious. Ethereum’s on-chain activity is declining despite some competing networks showing the opposite pattern.
According to Nansen data, Ethereum fees have fallen by 12% over the past 30 days, while transaction counts have dropped by 16%. In contrast, BNB chain prices rose 95%, while HypereVM is the network behind the high-liquefaction permanent trading platform, which rose 70% over the same period.
Ether Bulls is also looking forward to a $1.6 billion distribution from FTX Recovery Trust. The third tranche of creditor payments is scheduled for Tuesday, but funds may take up to three business days to reach your bank account. Analysts expect at least some of these recipients to reinvest in cryptocurrency.
Related: Hong Kong’s $500 Million Hashkey Fund – How Data Can Redefine BTC and ETH Finances
Coinglass data shows that if the ether rises to $4,350, about $1 billion could face liquidation in its disadvantages. Ether’s status as the second-priority institutional assets is clear, with $22.8 billion in spot ETF holdings and $55.6 billion in futures providing open profits, making them far ahead of their competitors.
From a fundamental perspective, Ether appears to be in a good position for strategic reserves to reclaim $4,800 as ETF demand continues to rise. However, in close conditions, sentiment remains heavily influenced by external factors such as the outlook for US economic growth, uncertaining the sustainability of etheric momentum.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.