Ethereum Bulls Overpower Sell-Off Concerns

Ethereum (ETH) demonstrated remarkable strength over the weekend, breaking through a 14-day resistance level of $4,600 despite news of a significant token conversion by the Ethereum Foundation.

Market Overview

On Sunday, October 5th, ETH price rose by 1.4%, reaching an intraday high of $4,619. This rally occurred even with lower spot trading volumes and the Ethereum Foundation's announcement that it would convert 1,000 ETH to stablecoins to fund ongoing research, grants, and donations.

Historically, such sell-offs have exerted downward pressure on ETH price action. However, recent derivatives market activity suggests a shift in this trend.

Derivatives Market Shows Bullish Sentiment

Data from Coinglass reveals a 1.7% increase in ETH open interest over the past 24 hours, reaching $41.3 billion. This growth happened despite a 7.9% decrease in trading volume. This divergence signals that the market remains optimistic about Ethereum's future, effectively absorbing the impact of the Foundation's sale.

Institutional Demand Fuels Rally

While insider sales can trigger fear, Ethereum's price surge and the influx of $700 million in new futures contracts indicate strong bullish sentiment. Ethereum ETFs experienced substantial net inflows, totaling $1.3 billion over five consecutive days. Additionally, ETH treasury reserves continue to grow, with market leaders like Bitmine (BMNR) increasing their ETH holdings to 2.6 million. These inflows have provided significant liquidity, supporting ETH's defense of the $4,600 resistance level.

Key Takeaways

• Ethereum price broke through $4,600 resistance.
• Ethereum Foundation's 1,000 ETH sell-off had minimal impact.
• Derivatives market shows strong bullish sentiment.
• ETF inflows and institutional demand are driving price.

If open interest and ETF inflows continue to rise, ETH price could potentially test $4,750 in the coming week.