ETH breaks through the 4300 mark, is it a major reversal?
Market Deep Analysis:
1. Fourfold momentum behind ETH's rise
The rising trend in August was driven by four core factors that completely changed the market landscape:
Institutional money inflow hits record high: Institutions such as BlackRock, Fidelity, and Bitwise have significantly increased their holdings. Since mid-May, ETFs and corporate treasuries have cumulatively purchased over $10 billion worth of ETH, equivalent to 32 times the new supply of ETH during the same period, creating a significant demand shock. In July and August, the inflow of funds into ETFs reached explosive levels, with net inflow of spot ETH ETFs surpassing $1 billion for the first time on August 11.
2. Corporate funds are also actively positioning themselves. For example, SharpLink Gaming purchased $250 million worth of ETH in August, increasing its total holdings to $1.3 billion; companies like BitMine have holdings exceeding $2 billion. This non-speculative strategic purchasing behavior is systematically absorbing circulating supply and providing strong structural support for Ethereum's price.
3. Multiple favorable regulatory developments: The U.S. passed the GENIUS Act, establishing a clear framework for crypto assets and DeFi. The Trump administration supports pension funds allocating to crypto assets and plans to establish a digital asset reserve. The European MiCA regulations have officially taken effect, allowing institutional funds in Germany to hold up to 20% in crypto assets, and banks are starting to pilot Ethereum bond issuance. Clear policies are driving ETH's shift from a speculative asset to financial infrastructure.
4. Continuous technological upgrades empower the network: The Pectra and Dencun upgrades have improved network efficiency, with Layer 2 solutions processing transaction volumes close to historical peaks, averaging 1.875 million transactions daily, while the mainnet gas fees remain low. The upcoming Fusaka hard fork in November will introduce new EIPs, enhancing scalability and stability while ensuring uninterrupted operation of smart contracts. These improvements make ETH more usable and attractive.
5. Macroeconomic environment and capital rotation in the crypto market: The latest U.S. CPI data was lower than expected, leading the market to reprice the probability of the Federal Reserve cutting rates in Q4 2025. Risk assets are favored by incremental capital, and ETH, as the second-largest cryptocurrency by market capitalization, naturally becomes the main beneficiary of inflows. Additionally, whales and institutions are withdrawing ETH in large amounts from exchanges, with a single-day peak of $285 million, resulting in a decrease in circulating supply. At the same time, over 70% of holders have held their coins for more than a year, indicating long-term confidence.
