Institutions Fuel Ethereum’s Rally – Will September Break the Pattern?
Ethereum saw a big rally this month, rising around 25% and hitting a price close to its previous all-time high of $4,950 in November 2021.
Quick overview
- Ethereum experienced a significant rally in August, rising approximately 25% and nearing its previous all-time high of $4,950.
- The surge was fueled by positive comments from Federal Reserve Chair Jerome Powell and substantial institutional demand, with Ethereum ETFs seeing over $1 billion in inflows in a single day.
- Despite the strong performance, historical trends indicate that Ethereum often experiences declines in September following August gains.
- Investors should remain cautious, as past patterns suggest a potential correction could occur, even with increasing institutional interest.
Ethereum saw a big rally this month, rising around 25% and hitting a price close to its previous all-time high of $4,950 in November 2021. This boost came after a rise of more than 15%, which was caused by Federal Reserve Chair Jerome Powell’s positive comments at Jackson Hole, which made people think that interest rates might go down in the future.
Although, a lot of institutional demand helped the surge. The Ethereum ETFs alone saw over $1 billion of inflows in a single day hitting a milestone since its launch in July 2024. In addition, the overall net inflows for all ETFs in August were about $2.79 billion. This demand showed that institutional investors were becoming more sure of themselves. They typically consider Ethereum as both a software platform and an asset that pays interest because of its staking incentives.
Another reason was that businesses kept using it. More big companies currently own billions of dollars worth of Ethereum, which shows that more and more businesses are interested in it.
Even though this is a strong performance, history tells us to be careful. Every time Ethereum went up in August since 2016, it went down in September by an average of 6.4%. In August 2017, ETH went up around 93%, but then it went down almost 21% in September. In August 2021, it went up 35.6% and then down 12.6%.
A new study brought this cyclical tendency to light. CryptoGoos, a commenter on cryptocurrency, said that September is usually a bad month for Ethereum in the years after the halving. Even though more money is coming into ETFs and more institutions are becoming involved, the probabilities from the past suggest that a correction is possible.
In general, the gain in August was spectacular, but traders and investors should be on their toes. It’s great that August’s gains were so strong, but history shows that September could bring a fall, even if institutional interest stays high.
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