The recent rise of Ethereum is attributed to increased demand from institutional investors, leading to significant price increases for the cryptocurrency.
Demand From Institutional Investors
Bitwise CIO Matt Hougan has linked Ethereum's recent price surge to a sustained 'demand shock' from institutional investors and treasury companies. According to him, 2.83 million ETH valued at over $10 billion has been purchased since mid-May, approximately 32 times the Ethereum issued in that same timeframe.
CITE_W_A: 'ETH is on a tear. After trading steadily downward for the first four months of the year, it has rebounded strongly. It’s up 50%+ in the past month and more than 150% since its lows in April. The reason? Overwhelming demand from ETPs and Corporate Treasuries.'
Ethereum Market Rebounds
Ethereum continues to gain momentum, having surged over 65% in the past month and 160% since April. While a slight pullback has been observed recently, analysts believe this is only a minor correction following the recent surge. Analyst Dan Crypto noted that the current Ethereum cycle is not overheated, adding any corrections will likely be minimal.
Expectations of Market Volatility
Ethereum's rising prices have also raised concerns over potential market volatility. Analysts from Santiment warn that markets typically move contrary to crowd expectations. They stated, 'When the crowd begins to perpetuate that we are in 'altseason', beware of some upcoming volatility.'
The Ethereum market continues to exhibit a dynamic interplay of growth and correction driven by strong interest from institutional investors. Monitoring the situation will be crucial as further volatility is anticipated in the near future.
