- ETH is seeing increasing institutional adoption.
- ETH is currently facing reduced buying activity.
Ethereum [ETH] is on the cusp of transformative developments, fueled by continued protocol improvements and strong adoption by major financial institutions.
Recently, another trillion-dollar bank announced plans to launch tokenized treasuries on the network, adding further legitimacy and potential demand to its ecosystem. These factors raise an important question: how could these developments impact Ethereum’s price trajectory?
Plans for Ethereum’s scalability and longevity
One of the most ambitious steps on Ethereum’s roadmap is The purificationan initiative designed to streamline the network by reducing storage and compute requirements for node operators.
Vitalik Buterin has emphasized the importance of this move as Ethereum’s data footprint continues to grow. Without this change, fewer individuals or organizations may be able to maintain full nodes, putting centralization at risk.
The Purge aims to address these challenges by introducing history and state expiration mechanisms, allowing nodes to function without storing extensive historical data.
This approach is expected to reduce operational costs for node operators, potentially making it more attractive to institutional participants.
However, the impact on the price of ETH may take some time; it largely depends on how quickly the benefits of this upgrade become apparent and deployed across the network.
Institutional adoption of Ethereum could drive demand
A large sofa recently announced plans to launch tokenized treasuries on the Ethereum network, signaling Ethereum’s appeal to major financial players.
Tokenized treasuries offer faster, secure transactions and represent a multi-billion dollar use case, underscoring ETH’s role as a leading digital asset platform.
This trend of financial institutions turning to Ethereum could drive significant demand for ETH, as transactions on the network require ETH to process and secure.
Furthermore, Ethereum’s price could see upward pressure if this institutional momentum continues, especially if more banks and financial institutions choose the network for tokenized assets.
Such adoption increases confidence in Ethereum’s long-term usefulness, potentially strengthening ETH’s position in the market.
ETH: Short and Long Term Outlook
From a technical perspective, Ethereum’s price is showing signs of consolidation with a potential upward move. The price is around $2,498 and is just below the 50-day moving average, indicating slightly bearish sentiment in the short term.
The Chaikin Money Flow (CMF) is showing small capital outflows, while the RSI is hovering around 46, indicating limited buying activity.
Source: TradingView
However, should institutional adoption increase and the benefits of The Purge become more apparent, ETH could break through $3,000. A break could spur ETH to further price increases.
Read Ethereum (ETH) price forecast 2024-25
Alternatively, if institutional interest falters or there are delays in the implementation of The Purge, ETH could test support levels around $2,200. This level is a critical support mark; a decline below that could lead to deeper declines.
Furthermore, Ethereum’s growing infrastructure and institutional appeal make a bullish argument in the long term. As these developments play out, potential price targets could extend to between $3,500 and $4,000.
