Ethereum Treasury Firms Report Dwindling Capital as Bitcoin Stays in Focus
Ethereum-focused companies are facing reduced treasury assets as institutional interest continues to concentrate on Bitcoin. This shift in capital allocation is prompting some analysts to suggest shorting Ether (ETH) as a hedge for investors with exposure to digital assets.
Market Dynamics Shift Toward Bitcoin
According to a recent report by 10x Research, Bitcoin remains the top choice among institutional investors, while Ether displays structural weaknesses. Analysts point to the pattern where institutions accumulate ETH, then later distribute it to retail buyers, fueling prior price momentum. However, this trend may be losing steam amid concerns about a lack of transparency in private investment in public equity (PIPE) transactions and unclear capital flows for Ethereum-tied projects.
DeFi Technologies was cited as an example, with its strategy allowing institutional players to purchase ETH at base value before reselling it to retail investors at a premium. This loop previously drove prices upward but appears to be breaking down.
Technical Signals Indicate Downside Risk
Multiple technical signals suggest that Ether's price could face further declines if it breaks support around the $3,000 mark. The report highlights that indicators such as weekly stochastics are showing a topping pattern, while a multi-year wedge formation suggests that a false breakout has occurred. If support fails, analysts warn the price could drop toward $2,700.
Major Holders of Ethereum Treasuries
Data from industry trackers reveal there are 15 major Ether-focused treasury companies, collectively holding about 4.7 million ETH. BitMine leads with approximately 3.3 million ETH, followed by SharpLink with 859,853 ETH and Bit Digital with 150,244 ETH on their balance sheets.
Market Sentiment Remains Cautious
Ether has faced volatility in recent months, with waning demand from US-based spot exchange-traded funds (ETFs) contributing to price swings. Despite this, some analysts, including Thomas Lee, maintain a positive long-term outlook. Lee reiterated his view last month that Ether could reach $10,000 by the end of the year, citing an established price base since 2021.
Nevertheless, cautious sentiment has dominated since the significant market crash on October 10, which resulted in the largest liquidation event ever recorded for digital assets. Since then, Ether and the broader crypto sector have seen difficulty regaining momentum.
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