Ethereum Treasury Demand Drops: Will This Impact ETH’s Path to $4,000?

Ether's price currently stands at $3,077, showing a 17% increase from its local low of $2,620, reached on November 21. However, the decline in treasury purchases and resistance levels are hindering a steady recovery toward the $4,000 mark.

Key Takeaways

Ether treasury demand has plummeted by 80%, raising doubts about its long-term viability.
Overcoming the $3,200 resistance level is essential for confirming ETH's recovery.
A breakout from Ether's falling wedge pattern could target $4,150, provided key support levels remain intact.

Ethereum treasury demand drops: Will this impact ETH’s path to $4,000?

Significant Drop in Ethereum Treasury Demand

Demand from corporate treasury entities for Ether has decreased dramatically, dropping 80%. These organizations had previously been buying ETH under the digital asset treasury (DAT) trend. According to data from Bitwise, these treasury companies bought only 370,000 ETH in November, compared to 1.97 million ETH at its peak in August—a decline of 81%.

Bitwise’s Senior Research Associate, Max Shannon, cautions that if the trend of treasury buying continues to dwindle while supply remains steady, the overall demand for Ether may slowly vanish.

Ethereum: Daily rate of institutional buying. Source: Capriole Investments

Issues with raising capital are driving many smaller firms out of the market, leaving only a handful of larger players still active. Bitmine, led by Wall Street strategist Tom Lee, continues to accumulate Ether, but monthly and weekly purchase volumes have been decreasing, as noted by CryptoQuant analyst Maartunn.

Monthly Treasury Values from Bitmine:

July 2025: $2.6B
August 2025: $4.3B
September 2025: $3.4B
October 2025: $2.3B
November 2025: $892M

While treasury purchases still exceed Ethereum's monthly supply of about 80,000 ETH, the dwindling pool of active buyers suggests potential problems for the sustainability of the DAT model. Reports indicate that Ether treasury companies are currently holding millions of dollars in unrealized losses.

Resistance Challenges for Ether Above $3,200

The latest price recovery for ETH has seen it regain a critical support zone near $3,080, where the 50-week and 100-week Simple Moving Averages (SMAs) intersect, according to Cointelegraph Markets Pro and TradingView.

A daily close above this threshold would signal that buyers are regaining control.

ETH/USD four-hour chart. Source: Cointelegraph/ TradingView

If this level is maintained, "we are looking forward to a potential upside," noted MN Capital founder Michael van de Poppe in a recent Twitter post. He pointed out that this resistance level aligns with the 200-period SMA, which has previously hindered price growth since October 28. According to Glassnode’s cost basis distribution heatmap, around 5.1 million ETH were acquired in this area.

Ethereum: Cost basis distribution heatmap. Source: Glassnode

To further support potential growth, closing above the 20-day Exponential Moving Average (EMA) at $3,100 would indicate a reduction in selling pressure, paving the way for a rise toward the 50-day SMA around $3,500.

Falling Wedge Pattern Forecasts Target of $4,150 for Ether

The daily chart indicates that the ETH/USD pair is breaking above the upper trendline of a falling wedge pattern at $3,000. A daily close above this level would confirm this breakout, setting the stage for Ether to potentially rise to the wedge's target at $4,150—a 36% increase from its current price.

ETH/USD daily chart. Source: Cointelegraph/ TradingView

This target aligns with price projections from various analysts, suggesting that Ether is considerably "undervalued" based on valuation models.