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Recently, the Ethereum (ETH) market has shown unprecedented heat, with multiple factors driving its price significantly higher.
First, institutional investors' interest in ETH has surged. The net inflow of the US ETH spot ETF broke through $1.02 billion in a single day, with BlackRock accounting for $640 million. Even more notably, the listed company BitMine invested $24.5 billion to acquire ETH on a large scale, causing public institutions' holdings to skyrocket by 84% in just one month. At the same time, a mysterious whale investor purchased approximately 220,000 ETH worth $950 million through over-the-counter (OTC) transactions at an average price of $3,546.
Secondly, the policy environment is gradually improving. Former U.S. President Trump has expressed support for pension funds investing in cryptocurrencies, while the U.S. Securities and Exchange Commission (SEC) has taken an open stance on ETH staking. These policy signals have injected confidence into the ETH market.
Furthermore, changes in the global economic environment have also brought benefits to ETH. The weakening of the dollar and expectations of interest rate cuts have made ETH an attractive "yield-generating asset", offering not only an annualized return of about 3% but also potential for appreciation.
Finally, the supply and demand relationship of ETH is undergoing significant changes. The daily purchase volume of the ETF has reached 3.2 times the daily issuance of ETH, intensifying the deflationary effect and further driving up the price of ETH.
Driven by multiple factors, the price of ETH has risen by 21% in a week, breaking the $4500 barrier, just a step away from its historical high. Market analysts predict that institutional investors may absorb up to 10% of the circulating supply of ETH.
However, investors should also be cautious. In the short term, the Relative Strength Index (RSI) indicates that ETH may be in an overbought state, and it is advisable to pay attention to the support level of $4000. In the long term, the development prospects of ETH still depend on the continuous recovery and innovation of its ecosystem.