The news that BlackRock holds 832,000 ETH has shaken the entire cryptocurrency market, with a current estimated value of over $3.6 billion, making it the second largest holder of ETH after the Ethereum Foundation. This position was established in a relatively short period, with a net inflow of $470 million per week, indicating that institutional investors' confidence in Ethereum is rapidly increasing.
$4365 is a price point of special significance; it is not only the average cost price for institutions like BlackRock but also a key support level in market technical analysis. The candlestick chart clearly shows that this price level has acted as both support and resistance multiple times over the past three months. Whenever the price drops to this level, a strong rebound occurs. Behind this phenomenon is the protective role of institutional funds, which will not easily let the price fall below their cost line.
Ethereum is at a critical turning point. ETH has formed a relatively stable oscillation pattern in the range of $4365 to $4790, and this sideways consolidation often foreshadows the brewing of a major market event. Trading volume data shows that there has been no panic selling during the price decline; instead, each pullback is accompanied by active buying, which is a typical signal of bottom formation characterized by price declines with shrinking volume and price increases with growing volume.
The Proto-danksharding upgrade has entered the testing phase, which will increase Ethereum's processing capacity to 3000 transactions per second, a qualitative leap compared to the current 15 transactions per second. The total locked value of DeFi protocols has surpassed $80 billion, and every additional $1 billion in TVL requires about 23,000 ETH as collateral and gas fees. This demand exceeds Ethereum's daily production capacity, and the reversal of supply and demand is driving ETH to transition from a currency to a productive asset.
The prosperous development of the Layer2 ecosystem provides important support for the long-term value of Ethereum. Arbitrum's daily trading volume has surpassed 120 million transactions, and Optimism's superchain ecosystem has attracted over 200 DApps. These Layer2 solutions not only alleviate pressure on the mainnet but, more importantly, they all require ETH as the settlement currency, further increasing the demand for ETH. Since the implementation of EIP-1559, the amount of ETH burned has reached an annualized rate of 1.8% of the supply, and this deflationary mechanism will generate strong price support under the driving force of growing demand.
