Ethereum’s price remains stable despite recent inflows from spot ETF investments and a rally related to Donald Trump’s election in November 2024.
While short-term price movements are underwhelming, long-term demand is on the rise. Analysts at Matrixport have noted increased ETH purchases from the decentralized finance group World Financial Liberty, associated with President Donald Trump.
World Liberty Financial plans to create a “strategic reserve” with acquired altcoins, although its purpose is unclear. Market sentiment is cautious in anticipation of Ethereum’s Pectra upgrade, which is set to begin on the Holesky and Sepolia testnets in February and March, with a mainnet launch in April. Analysts believe the upgrade is unlikely to affect prices significantly.
Ethereum’s price may continue to struggle without a strong bullish catalyst, and its market dominance has already dropped to just 10% per the analyst. As previously reported, the Fear and Greed Index recently dropped to 35—its lowest level since October 2024—indicating growing market fear. Historically, such sentiment has been associated with declining cryptocurrency prices.
Adding to the uncertainty, crypto trader MaxBecauseBTC noted on X that Ethereum recently experienced its largest liquidation event in over two years, with funding rates turning profoundly negative. He compared the situation to the March 2020 COVID crash, emphasizing that those who remain patient may benefit from the current market turbulence.
Meanwhile, Matrixport’s research indicates that Ethereum’s upgrades offer long-term advantages rather than immediate price increases. The fluctuating demand for Ethereum ETFs and the emergence of meme coins on cheaper networks have pressured ETH’s market position. Despite the competition from TRON, which benefits from lower transaction fees, Ethereum’s recent increase in ether issuance has increased confidence in its security. While the options market for Ethereum remained stable, its spot price showed lower volatility than short-term implied volatility, suggesting expectations of potential short-term fluctuations and uncertainty regarding ETH’s near-term outlook.
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