Significant Milestone Approaching: Ethereum Edges Close to Record Peak despite Widespread Retail Dumping
In the world of cryptocurrencies, Ethereum is making waves as it approaches a potential breakthrough and new record levels. Despite a current 6.4% gap from its all-time high of $4,891, the second-largest digital asset by market cap is showing strong signs of resilience.
Santiment, a leading platform for on-chain and market analytics, has highlighted Ethereum's proximity to a historic milestone. This potential breakthrough could be a result of several key factors.
Favorable Macroeconomic Environment
Declining U.S. inflation (2.7% YoY) and widespread expectations of Federal Reserve interest rate cuts are creating a bullish backdrop for risk assets like Ethereum. Traders price in an 82% chance of a rate cut in September 2025, which boosts speculative demand for Ethereum.
U.S. pro-growth policies and regulatory rollbacks under Donald Trump’s administration are fostering investor confidence in risk assets, with Ethereum expected to benefit more than Bitcoin due to its utility-driven model.
Strong Institutional Inflows and ETF Adoption
Ethereum ETFs saw nearly $2 billion inflows in Q3 2025, with total assets under management reaching about $19.2 billion. This confirms growing institutional trust and investment in Ethereum.
Anticipation of further crypto ETF approvals for altcoins is reinforcing positive market sentiment. Corporate treasury buying and institutional actors like Arthur Hayes are accumulating ETH, with some setting aggressive price targets (e.g., $20,000) based on technical and macro signals.
Regulatory Clarity and Legislation
The passage of the GENIUS Act provides clarity around stablecoin regulation, reducing uncertainty. Since over 50% of stablecoins operate on Ethereum and stablecoins constitute roughly 40% of blockchain transaction fees, this legal framework strengthens Ethereum’s infrastructure role.
The U.S. government is exploring inclusion of cryptocurrencies in retirement accounts, further integrating crypto into traditional finance.
Technical Upgrades and Reduced Liquid Supply
The Pectra protocol upgrade and heightened staking activity are reducing liquid ETH supply, creating scarcity and supporting price appreciation. Sustained activity in DeFi and NFTs on Ethereum boosts demand for ETH as gas fees and ecosystem participation tokens.
Market Sentiment Dynamics and Retail Behavior
Despite retail traders persistently selling ETH, this is seen as a contrarian bullish signal. Historically, excessive optimism among retail leads to price corrections, while retail fear or sell-offs often coincide with upward price momentum.
The number of active Ethereum addresses is near a multi-year high (over 680,000 daily), indicating growing network engagement from new and returning users.
In summary, Ethereum’s price surge toward new all-time highs despite retail sell-offs is largely due to institutional demand fueled by ETFs and corporate buyers, macroeconomic tailwinds like expected rate cuts, regulatory progress enhancing crypto legitimacy, technical improvements tightening supply, and contrarian retail selling behavior signaling potential for further gains.
This quiet but steady accumulation suggests that larger players are positioning themselves for a potential breakout. The divergence between price action and retail sentiment is becoming increasingly notable in this rally. With minimal sentiment-based resistance in the market, prices appear well-positioned to push higher.
Santiment points to previous scenarios to support the observation of selling from retail traders as a potentially bullish signal. Ethereum's potential breakthrough could set the stage for new record levels.
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