Carnival or Trap? After ETH Hits New High, Institutions Gamble Amidst High Leverage
On August 11, according to Matrixport's latest analysis post, Ethereum (ETH) has successfully broken the $4000 mark, reaching a new high since the end of 2021.
This strong surge is primarily driven by institutional buying and a wave of short liquidations. On-chain data shows that the daily trading volume has exceeded 1.8 million transactions, with more than 30% of the supply being staked.
Additionally, the U.S. Securities and Exchange Commission (SEC) recently ruled that liquid staking tokens do not fall under securities, which is a significant regulatory boost that has further bolstered market confidence.
Affected by this optimistic sentiment, the pace of institutional investor positioning has significantly accelerated. Data shows that the total amount of ETH held by some listed companies' treasuries has surpassed $3.5 billion, nearly a tenfold increase compared to last year.
At the same time, the U.S. spot Ethereum ETF has also set a historical record for daily net inflow at $726.6 million, with total holdings now exceeding 5 million ETH, approximately $20.3 billion.
Moreover, large purchases from well-known institutions and the upcoming upgrades of the Pectra and Fusaka networks, which will enhance scalability, provide strong support for Ethereum's medium- to long-term fundamentals.
However, amidst the bullish sentiment, the market has also signaled short-term caution. Analyst CryptoOnchain pointed out that the estimated leverage ratio (ELR) across all exchanges has reached as high as 0.68, nearing historical highs, indicating that the overall market leverage is too high and increasing the risk of significant short-term volatility.
In summary, the market presents a complex pattern of short-term volatility coexisting with medium-term bullishness. In the short term, high leverage and testing of key resistance levels exacerbate downside risks; however, from a medium-term perspective, strong institutional inflows, sustained ETF demand, and growth in network fundamentals provide solid support for the market, likely maintaining an overall upward trend.
Matrixport analyst Markus Thielen believes that the next target price for ETH is $4362, while the historical high of $4892 remains its ultimate milestone.
CryptoOnchain also pointed out that the $3980 to $4020 range is seen as key support in the short term, and once it breaks through the $4450 to $4550 resistance range, it will open up further upward space.
What do you think ETH will do next? Leave your views in the comments!
