Ethereum’s Price Struggles Despite $500 Million Influx into Spot ETFs

Ethereum’s Stagnant Price Movement

Despite a significant influx of $500 million into spot Ethereum exchange-traded funds (ETFs), the second-largest cryptocurrency by market capitalization, Ethereum, continues to struggle with little price movement. The Ethereum price has failed to gain momentum, even with increased investment from long-term investors.

Increased Demand from Long-Term Investors

Analysts at Matrixport note that demand from long-term investors appears to be increasing, pointing to increased ETH purchases by members of the World Financial Liberty, a decentralized finance group tied to President Donald Trump. This increased demand is a positive sign for Ethereum, but market sentiment remains cautious.

World Liberty Financial’s Strategic Reserve

As previously mentioned, World Liberty Financial plans to create a “strategic reserve” with altcoins they’ve bought, although the exact purpose of the reserve is still unclear. The creation of this reserve may have a significant impact on the Ethereum market, but its effects are yet to be seen.

Ethereum’s Pectra Upgrade

Ethereum’s Pectra upgrade is set to launch on the Holesky and Sepolia testnets in February and March, with the mainnet coming in April. Unlike past upgrades, expectations for a significant price movement are low, according to analysts. This lack of optimism may contribute to Ethereum’s stagnant price movement.

Market Sentiment and Expectations

Analysts note that “without a clear bullish catalyst, ETH prices may continue to struggle, and Ethereum’s market dominance has already dropped to just 10%.” This cautious sentiment is reflected in the broader altcoin market, which has faced downward pressure in recent times.

Altcoin Market Performance

The altcoin market, including Dogecoin, XRP, and Solana, has faced significant downward pressure. The fear and greed index has dropped to 35, its lowest level since October 2024, signaling increasing fear in the market. Historically, a fearful market tends to lead to declines in cryptocurrency prices.

Altcoin Season Index

The altcoin season index has also fallen to 33, down from 47 at the start of the year, suggesting weaker demand for altcoins compared to Bitcoin. While Bitcoin has remained relatively stable, the decline in the altcoin index signals that investors are increasingly favoring Bitcoin over other cryptocurrencies.

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