Key Points
Despite a significant investment in spot Ethereum ETFs, the price of Ethereum (ETH) remains unresponsive.
The second-largest cryptocurrency by market cap is struggling to show any significant price movement.
Increasing Demand Yet Stagnant Prices
Even with the influx of funds, Ethereum’s price is stuck.
This is despite investment from spot exchange-traded funds.
The cryptocurrency has retraced most of its gains from the Trump election rally in November 2024.
However, analysts at Matrixport indicate that the demand from long-term investors is on the rise.
They point to increased Ethereum purchases by members of the World Financial Liberty (WFL).
This is a decentralized finance group associated with President Donald Trump.
Previously, crypto.news reported that WFL plans to establish a “strategic reserve” with the altcoins they have bought.
However, the exact purpose of this reserve remains unknown.
Despite WFL’s increased Ethereum acquisition, market sentiment remains cautious.
This is particularly true in the lead-up to Ethereum’s Pectra upgrade.
The upgrade is set to launch on the Holesky and Sepolia testnets in February and March, with the mainnet launch slated for April.
Unlike previous upgrades, analysts predict low expectations for significant price movement.
Matrixport analysts state, “Without a clear bullish catalyst, ETH prices may continue to struggle, and Ethereum’s market dominance has already dropped to just 10%.”
The wider altcoin market is also under downward pressure.
This includes cryptocurrencies like Dogecoin (DOGE), XRP (XRP), and Solana (SOL).
According to a previous report by crypto.news, the fear and greed index had fallen to 35.
This is the lowest level since October 2024, indicating increasing fear in the market.
Historically, a fearful market tends to result in a decline in cryptocurrency prices.
The altcoin season index has also dropped to 33, down from 47 at the start of the year.
This suggests a weaker demand for altcoins compared to Bitcoin (BTC).
While Bitcoin has remained relatively stable, the decline in the altcoin index signals that investors are increasingly favoring Bitcoin over other cryptocurrencies.