Ethereum News Today: DATs' Share Buybacks Drive ETH Sell-Offs, Deepening Downtrend

Ethereum faces mounting pressure as FG Nexus offloaded nearly 11,000 ETH, valued at approximately $33 million, to fund a share buyback program. The move, announced amid a broader slump in digital asset treasury (DAT) stocks, underscores the sector's struggle as crypto prices remain volatile and corporate treasuries grapple with declining net asset values (NAVs) according to data. FG Nexus sold the ether to repurchase 3.4 million shares, or 8% of its outstanding float, at an average price of $3.45 per share, significantly below its reported NAV of $3.94. The firm also secured a $10 million loan to accelerate the buyback, reflecting the growing reliance on leverage within the DAT space.

The sell-off follows a similar strategy by ETHZilla in October, which liquidated $40 million in ETH to support its stock price. These actions highlight a troubling trend: DATs, which collectively manage over $42.7 billion in crypto assets, are increasingly forced to liquidate holdings to prop up equity valuations as their stocks trade at steep discounts to NAVs. FG Nexus' shares, for instance, have plummeted 94% from their August peak of $38.30, closing at $2.41 on Thursday. The company now holds 40,005 ETH and $37 million in cash and stablecoins, but its debt has swelled to $11.9 million.

The broader market impact is evident. Ethereum's price dipped to $2,860, testing critical support levels after failing to reclaim the $3,100 threshold. Analysts attribute the weakness to prolonged DAT sector struggles, saturated markets, and soft demand for crypto treasuries.

K33, a blockchain data firm, noted that NAV discounts have exacerbated selling pressure, with companies like FG Nexus and ETHZilla triggering further declines by prioritizing stock stability over long-term ETH accumulation.

Industry observers warn of systemic risks. "The DAT model is under stress," said Kyle Cerminara, FG Nexus' CEO, in a statement. "We plan to continue buying back shares while our stock trades below NAV, which creates an asymptotic effect on per-share value as our balance sheet strengthens." However, critics argue that such tactics risk accelerating ETH's price erosion, particularly as major treasuries-including BitMine, which holds 3.56 million ETH-also face unrealized losses.

Technical indicators reinforce the bearish outlook. Ethereum's 50-, 100-, and 200-day exponential moving averages remain in descending order, while the Relative Strength Index (RSI) hovers near oversold territory at 26. A break below the $2,850 support level could push ETH toward $2,300, according to FXStreet analysts. Meanwhile, on-chain data reveals $170 million in ETH liquidations over the past week, with long positions accounting for 83% of the losses.

The DAT sector's challenges extend beyond individual firms. As of November 20, over $4 billion in ETF outflows and a $1.4 billion weekly liquidation event have amplified market fragility. With leverage unwinding and macroeconomic headwinds persisting, the path to recovery remains uncertain. "Historical patterns suggest ETH could rebound after a deleveraging phase," noted a Glassnode report, "but a sustained rally will require stabilization in both macro conditions and DAT balance sheets."