Ethereum Stabilizes Above $4,100, Institutional Buying and Leverage Surge Drive Cautious Recovery
Ethereum is in a precarious recovery period after a big drop over the weekend that brought prices down to $3,450 before bouncing back to
Quick overview
- Ethereum is recovering from a significant drop, currently trading above $4,100 after hitting $3,450 over the weekend.
- Institutional buying, particularly by BitMine, has bolstered ETH's price, with the company acquiring over 202,000 ETH during the market downturn.
- Despite the rebound, the return of leverage in futures markets raises concerns about the sustainability of this recovery, as historical patterns suggest potential price declines.
- Traders should monitor Ethereum's ability to maintain support above $4,000 and break resistance levels to confirm a bullish trend.
Ethereum ETH/USD is in a precarious recovery period after a big drop over the weekend that brought prices down to $3,450 before bouncing back to stay over $4,100. The second-largest cryptocurrency by market cap is currently stuck between institutional buying and the prospect of another liquidation cascade. Traders are using more leverage, which analysts say might lead to a “revenge pump” that will fail.
Institutional Confidence: The BitMine ‘Alchemy of 5%’
Institutional buying pressure has been the main reason why ETH has been able to rebound. BitMine, the company that owns the most Ether in the world, took advantage of the market’s problems over the weekend to buy more than 202,000 ETH for an average price of $4,154 per token. This was worth almost $827 million.
This aggressive buying spree increased BitMine’s total holdings over 3 million ETH, which is almost 2.5% of Ethereum’s total circulating supply. The company’s crypto treasury is now worth $13.4 billion. Tom Lee, the head of research at Fundstrat and chairman of BitMine, said that the acquisition took advantage of volatility. He said, “Deleveraging can cause assets to trade at substantial discounts to fundamentals,” which benefits long-term holders but hurts overleveraged traders.
This buying by institutions shows that they believe in Ethereum’s long-term future, even if the market saw a big fall after a $19 billion liquidation event that wiped out overleveraged positions on major exchanges. BitMine’s plan to get 5% of the ETH supply is a strong message to other corporate treasuries that they should also think about long-term strategy, even if the market is in disarray right now.
ETH/USD Technical Analysis: Leverage Returns with a Warning
But there is a darker technical pattern forming under the surface recovery. Ethereum’s Open Interest has gone up 8.2% in the last 24 hours, which means that leverage is quickly returning to futures markets. According to onchain expert Maartunn, this return of trading based on leverage may not be real. He points out that over 75% of recoveries based on leverage traditionally go back to falling prices soon financing rates return to normal.
Only around 25% of these rallies keep going for a long time, and that’s usually when new spot buying supports them instead of just derivatives trading. This means that Ethereum’s current price rise is mostly due to speculative positioning rather than real demand on the spot market.
From a technical point of view, Ethereum is currently facing resistance between $4,250–$4,300, which is where the 50-day moving average is located. This area used to be support, and getting it again would confirm a real shift back to a bullish structure. The good news is that ETH has clearly bounced back from the 200-day moving average, which shows that it is a major demand zone where institutional buyers are protecting the price. The 100-day moving average is now leveling out, which shows that the market is cautious.
Ethereum Price Prediction and Technical Outlook
If bulls can keep prices above the important $4,000 support level and break through the $4,250–$4,300 resistance, Ethereum might go for $4,500 and then $4,750. These developments would show a full rebound and prove that institutional buying is stronger than speculative selling. But if the price doesn’t stay above the 200-day moving average, it could fall down to $3,600 or below, which would create another capitulation zone for people who are panicking.
The next several days are really important. Ethereum’s rebound seems good from a technical point of view, and institutional confidence from companies like BitMine shows that long-term holders are still committed. But the return of leverage to derivatives markets is problematic because it makes the downside risk uneven if mood changes. Traders and investors need to keep an eye on whether ETH’s current stabilization near $4,100 leads to spot-driven accumulation or is just another short-term bounce that will reverse when overleveraged positions unwind.
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