Market Dynamics and Key Influences
The price of Ethereum (ETH) surpassed the $4,000 mark on Sunday, October 26. This significant movement was influenced by prevailing optimism surrounding anticipated trade talks between Donald Trump and Xi Jinping in Asia. The visit, which included scheduled discussions in Korea on Friday, October 30, created a positive sentiment across financial markets.
During a period of market decline in mid-October, Ethereum treasury firms demonstrated a consistent and robust accumulation strategy. These firms notably surpassed their Bitcoin counterparts in terms of circulating supply dominance. As the market experienced a recovery over the weekend, Ethereum has continued to be a focal point for intense speculation. Bear traders, in particular, strategically positioned their leverage around the $4,100 price level on Sunday.
Ethereum's Price Rally and Geopolitical Factors
On Sunday, October 26, Ethereum's price saw a notable rebound, reaching $4,099. This represented a 10% increase from its seven-day low of $3,811, recorded the preceding Wednesday. This upward trend mirrored broader market gains, with all top 10 cryptocurrencies, including Bitcoin (BTC), SOL, and XRP, reporting consecutive days of positive performance over the weekend.
The resurgence in Ethereum's price was significantly linked to the ongoing Asia visit of Donald Trump. He commenced his tour with positive developments, including the signing of a peace treaty between Cambodia and Thailand in Malaysia on Saturday. These events contributed to easing geopolitical tensions ahead of the crucial trade negotiations with China's Xi Jinping, which were scheduled for Friday, October 30.
Ethereum Treasury Firms Outpace Bitcoin in Supply Dominance
Despite the price fluctuations experienced by Ethereum throughout October, treasury firms, including those led by Tom Lee's Bitmine (BMNR), maintained an aggressive pace of accumulation. Data from Artemis highlights a significant shift, with publicly-listed companies holding Ethereum now demonstrating greater supply dominance compared to their Bitcoin-holding counterparts.
As of October 23, the total Ethereum supply held by Digital Asset Treasury firms reached 3.2 million ETH. This figure surpasses the collective holdings of Bitcoin's corporate investors, which stood at 640,040 BTC, representing 0.36% of the total 19 million BTC in circulation.
This trend suggests that the demand for Ethereum Treasury holdings is projected to exceed that of Bitcoin in 2025. This anticipated growth is further bolstered by the evolving cryptocurrency regulatory framework and the approval of Ethereum ETF staking in 2025.
Ethereum has garnered considerable praise following its transition to Proof-of-Stake (PoS), which resulted in a substantial reduction in energy consumption by 99%. Additionally, the introduction of a yield-bearing feature has made Ethereum more appealing to global conglomerates and portfolio managers adhering to sustainable and clean energy mandates.
Art Malkov, a strategic advisor at Electroneum, an eco-friendly blockchain project, affirmed that yield is a more compelling factor for corporate treasuries and institutional investors. He noted that while yield is a primary topic in institutional discussions, energy efficiency is typically raised only when compliance teams are involved.
Ethereum Price Forecast: Resistance Levels and Market Sentiment
On Sunday, October 26, Ethereum's price experienced a 3% gain, stabilizing around the $4,077 level. However, derivatives market data from Coinglass indicates that a majority of new Ethereum contracts initiated on Sunday were bearish.
Ethereum's 24-hour trading volume increased by 54%, while open interest saw a rise of 5.88%. The long-to-short ratio decreased to 0.82, signaling that more short contracts were opened than long ones. An increase in short contracts relative to longs during a price rally often suggests that investors are anticipating a potential price reversal.
With Trump's meeting with China and the upcoming U.S. Federal Reserve rate decision on the horizon, traders appear to be hedging against potential downside risks. These significant events have the potential to trigger large-scale cryptocurrency liquidations, a pattern observed in previous weeks.
Regarding Ethereum price projections for the upcoming week, bears have concentrated approximately $650 million in short contracts around the $4,150 resistance level. This concentration represents 76% of the total $840 million in short leverage deployed within the past 24 hours.
Should Ethereum successfully break through this resistance, it is expected to encounter relatively lighter opposition until the $4,240 zone, where another significant supply cluster is located. Conversely, a failure to surpass the $4,100 level could lead to liquidations, potentially driving Ethereum prices back towards short-term support near $3,911. This support level is where bulls have deployed approximately $1.5 billion in long Ethereum contracts.