Institutional interest is flocking the Ethereum ecosystem as the coin struggles with the recent price drop. Today, ETH has transitioned to a downward trend after showing signs of a recovery earlier. Weekly data also shows that the coin has dipped by over 16%.
Despite the price drop, Fidelity and BlackRock are still buying Ethereum. The recent purchases by these two giants signify prospective bullish momentum for the coin.
104,897 ETH Tokens Bought By Fidelity and BlackRock
Fidelity and BlackRock are two institutions known to be great fans of Ethereum. Recently, the two firms bought a total of 104,897 ETH tokens. According to a post by Whale Insider, Fidelity bought 4,362.48 ETH. These tokens were worth $20.06 million during the time of purchase.
JUST IN: Fidelity buys 4,362.48 ETH worth $20.06 million. pic.twitter.com/tyINnFP0Rh
— Whale Insider (@WhaleInsider) February 6, 2025
However, out of the total 104,897 ETH tokens bought by the two firms, BlackRock made the largest purchase. The firm acquired 100,535 ETH coins worth $284.92 million on Feb.5, 2025 as shared in another Whale Insider X post.
These purchases by Fidelity and BlackRock have happened at a time when Ethereum is struggling to stay above the 2,800 mark. However, these institutions expect a price rebound in the near future.
ETH Exchange Netflows Show Bullish Rally Ahead
Ethereum derivative exchange netflows have dropped to -300,000 ETH. This is the lowest point these netflows have hit since August 2023 according to data on CryptoQuant.
The decline marks an extensive withdrawal from trading platforms. It also shows that traders are either closing their leveraged positions or placing their funds in cold wallets for storage. This in turn leads to a decrease in the available supply of ETH in the market. Selling pressure is thus decreased and a bullish reaction may come up if market demand rises or stays steady.
However, the bulk movement of ETH tokens into cold wallets might generate a dual effect on the market due to portfolio deleveraging activities. The market may experience increased volatility in the short -term as a result of long position overleveraging liquidations.
Deleveraging also removes weak traders from the market hence yielding better market conditions for the future. Traders must thus keep an eye on liquidity levels as it is very essential. If the price of ETH increases beyond certain thresholds, short position holders may be forced to liquidate their positions thus accelerating further price increase.
Ethereum is currently trading at $2,748.72 indicating a dip of 1.65% in the day and 16.4% in the weekly chart. Whether the price of Ethereum will flip into a bullish rally depends on various factors other than just institutional interest and derivative exchange netflows.
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