Ethereum Price Analysis: ETF Sponsors Acquire $6.84B ETH Amid Market Dip –What Next?

 Key Insights:

• Ethereum (ETH) price dipped below $2,140 on Monday morning, down 11.9% from the 2023 peak of $2,403 recorded on Dec 9. 
• Since Blackrock officially filed for Spot ETH ETF on Nov 16, Fund offering companies have entered a buying spree, acquiring over 7,000 ETH in the last 30 days. 
• A large percentage of the fresh acquisitions was done right after ETH price tumbled from last week’s peak. 

Ethereum (ETH) price tumbled toward $2,140 on Monday morning, an 11.9% decline from the 2023 peak of $2,403 recorded on Dec 9. A vital on-chain metric shows that ETF fund companies have capitalized on the latest price downswing to acquire millions of dollars worth of ETH coins. 

Will this growing demand from ETF Fund sponsors trigger an ETH price rebound this week? 

ETF Sponsors Now Hold $6.84B ETH, Capitalizing on the Price Dip to Acquire More 

Ethereum price is currently trading at $2,130 a staggering 11.90% downtrend from last week’s peak price for $2,403. 

But interestingly, on-chain data trail reveals that companies filling to offer Ethereum-based spot Exchange Traded Funds (ETF) have stealthily capitalizing on this price dip to acquire more ETH to beef-up their capital base as the SEC approval hangs in the balance. 

Indicatively, Cryptoquant’s Fund Holdings metric shows that  the fund sponsors entered a buying spree after Blackrock officially filed for Spot ETH ETF with the SEC on Nov 15.

As depicted in the chart below, fund sponsors held a total of 3,171,323 ETH in their cumulative holdings as of Nov 16. But now, a month later, they have now increased their holdings to 3,178,514 ETH. 

This illustrates that between November 15 and Dec 15, the ETF fund sponsors have acquired a whopping  7,191 ETH. But notably, 4,029 ETH (56%) of that was added right after Ethereum price dropped from the 2023 peak of $2,400 last week. 

Cryptoquant’s Fund Holdings metric, tracks the total supply of ETH coins held by digital assets investment firms such as trusts, ETFs, and other crypto derivative product offerings. 

When valued at the current prices of $2,100, the total Ethereum balance in custody of the Fund Sponsors is now worth $6.8 billion, with $15 million of that added amid the price dip that has ensued over the past week. 

An increase in the number of coins held by fund sponsors is a bullish signal for a number of reasons. 

• Firstly, it indicates growing confidence among institutional investors, as these entities, including trusts, ETFs, and other crypto derivative product offerings, are typically managed by professionals who conduct thorough research before making significant investments. 

Hence, the accumulation of $6.84 billion Ethereum by these fund sponsors suggests a positive outlook on the future price performance of ETH.

• Secondly, the rise in the total Ethereum balance held by these investment firms reflects a broader trend of institutional participation in the crypto market. Institutional involvement is often seen as a positive development for the maturity and sophistication of the cryptocurrency sector as a viable investment class.

This attracts  increased liquidity, stability, and a potential influx of additional capital.

• Lastly, the addition of $15 million worth of Ethereum amid a price dip signals a strategic move by fund sponsors to capitalize on favorable market conditions. Such opportunistic buying behavior reinforces the notion that these institutional players believe in the long-term value and potential appreciation of Ethereum, even during short-term market fluctuations.

Most importantly, many fund sponsors are inclined to hold their crypto assets long-term as they may need to manage liquidity tightly to fulfill redemption requests promptly. Hence pulling $6.84 billon from immediate market supply could accelerate ETH’s next price rally once there’s an unusual spike market demand. 

In summary, the increase in Ethereum holdings by fund sponsors not only signifies confidence and positive sentiment but also aligns with the broader narrative of growing institutional interest