Ethereum News Today: Institutional Shifts Fuel Ethereum's Supply Shock and Price Surge

Ethereum fell below $4,600 on Monday, following a record high of $4,945.60 reached just days prior. The cryptocurrency's price trajectory has sparked intense analysis among traders and analysts, highlighting a shift in momentum from Bitcoin to Ethereum. According to CoinGecko data, the price surge saw Ether briefly surpass $4,900 on Sunday before beginning a corrective pullback [3]. This move aligns with broader market dynamics, including declining exchange reserves and evolving investor sentiment.

The recent surge in Ethereum prices has been attributed to growing institutional interest and increased adoption of ether-backed ETFs. Several firms, including SharpLink Gaming (SBET), BitMine Immersion Technologies (BMNR), and EthZilla (ETHZ), have begun allocating capital to ether in a strategy that mirrors the approach of major players like Michael Saylor’s company [3]. Institutional investors are increasingly recognizing Ethereum’s unique value proposition, particularly in the realm of smart contract functionality and its role in facilitating stablecoin transactions [3].

Analysts have pointed to a key factor behind Ethereum’s strong performance: shrinking exchange reserves. When fewer coins are held in centralized trading venues, the available supply for selling is reduced, leading to potential price acceleration as buyers must pay higher to acquire ether. This dynamic, often referred to as a “supply shock,” has been highlighted as a contributing factor to Ethereum’s recent price movement [1].

Despite the bullish trend, some analysts have cautioned that the market may experience a short-term pullback. The unusually large weekly price movement, driven in part by limited weekend liquidity, raises concerns about a retracement once trading resumes with full participation on Monday. Traders are advised to monitor the $4,600 level, which could serve as a support zone and a potential indicator of the broader trend’s strength [1].

Ethereum’s performance in the second half of 2025 has been notable, with its price breaking above the 2021 all-time high after a long period of consolidation. This breakthrough was characterized as a classic price discovery phase, where the market is setting new benchmarks without historical resistance levels to guide the movement. The five-year ETH-USD chart from TradingView illustrates this breakout clearly, showing no previous overhead levels to restrain the upward momentum [1].

The shift in market leadership from Bitcoin to Ethereum reflects broader shifts in investor behavior and asset rotation. According to analyst Miles Deutsher, Bitcoin’s recent rallies have shown signs of exhaustion, while Ethereum continues to attract strong follow-through buying and dip-purchasing activity. This trend suggests that traders are increasingly favoring Ethereum as the stronger asset in the current market environment [1].

Ethereum’s underlying economic model, which typically results in neutral or negative net issuance of new coins, further supports its price action. This supply constraint, combined with rising demand, has positioned Ethereum to potentially outperform other cryptocurrencies in the near term. As investors begin to better understand Ethereum’s distinct value proposition—particularly its role in redefining internet infrastructure—its market share and price could continue to expand [3].

Source:

[1] As ETH Breaks Above USD 4,900, Analyst Sums Up Crypto Market: BTC Is Exhausted, ETH Isn’t (https://www.coindesk.com/markets/2025/08/24/as-eth-breaks-above-usd4-900-analyst-sums-up-crypto-market-btc-is-exhausted-eth-isn-t)

[2] Ethereum Hits Record, Cryptos Reverse On Bitcoin Flash ... (https://www.investors.com/news/ethereum-price-record-high-bitcoin-cryptocurrency-fed-speech/)

[3] Ether, Ethereum's Coin, Breaks 2021 All-Time High (https://www.axios.com/2025/08/24/ether-all-time-high)