ETH Price Drops Despite Demand for Ethereum: $5000 Vision Intact?

Key Insights:

• ETH price briefly spiked as Fed comments lifted risk assets.
• Spot ETH funds saw $341M in inflows with no outflows reported.
• Corporate treasuries expanded holdings, led by Bitmine Immersion Tech and SharpLink Gaming.

Ethereum approached $5,000 over the weekend after Federal Reserve Chair Jerome Powell indicated that interest rates could be reduced in coming months. Despite the recent short-term drop in ETH price analysts predict a decent run for Ethereum in the near time.

The signal spurred demand for risk assets, including digital tokens. However, this rise in price was short-lived as the Ethereum price dropped over 3% in a few hours.

ETH Price Rises on Fed Policy Expectations

The ETH price hit $4,953 during the weekend, marking its first record high since 2021. Today, however, the price dropped towards $4,540, settling at $4,460 at press time.

The price is currently down 1.4% over the last 24 hours but still higher by 7.35% compared with last week and 26.94% higher over the past month.

Bitcoin also advanced but lagged behind Ethereum’s stronger momentum. Powell’s remarks at the annual Jackson Hole meeting triggered the move.

Market expectations for a September rate cut rose from 75% to 87%, according to CME FedWatch data.

The shift followed months of pressure from President Donald Trump, who publicly called for lower rates earlier in the year.

Traders said the market viewed Powell’s comments as the clearest signal yet that policy tightening was ending. Lower rates often increase liquidity in risk markets, and tokens responded in line with equities.

Institutional Inflows Support ETH Price

Ethereum’s gains were not driven solely by macroeconomic sentiment. Large entities and funds increased their holdings in 2025.

Data from the Strategic ETH Reserve showed more than 10.6 Million ETH, valued at over $50 Billion, was locked across corporate treasuries and institutional vehicles.

Bitmine Immersion Tech, led by Wall Street veteran Tom Lee, added $45 Million in ETH, lifting its total to 1.5 Million tokens valued above $7 Billion.

SharpLink Gaming reported holdings of around 740,000 ETH, while Coinbase controlled about 137,000 ETH.

Spot Ethereum ETFs also recorded heavy inflows. On Friday, all nine US-listed products posted a combined $341 Million in net additions, with no outflows.

Analysts said this marked a structural shift from prior years when Ether often faced persistent selling above $4,000. Sustained demand allowed the token to hold above that level for the first time since 2021.

Broader Adoption Keeps Momentum Intact

Analysts noted that Ethereum’s performance increasingly mirrored traditional financial markets. Charley Cooper, chief operating officer at Ava Labs, said lower interest rates typically benefited digital assets.

He argued that Powell’s position carried weight not only for monetary policy but also because of his interest in blockchain technology.

“The early view that tokens moved separately from macroeconomic cycles no longer holds,” Cooper said. “Digital assets now react to rate expectations in the same way as equities.”

Ethereum also benefited from a more supportive regulatory environment. Analysts cited favorable rulings on stablecoins and increased adoption by traditional finance firms for settlement, tokenization, and decentralized finance services. These structural trends reinforced long-term demand for ETH.

Meanwhile, the Bitcoin price slipped about 2 percent on Monday to around $112,000. Gadi Chait, head of investment at Xapo Bank, said the decline reflected short-term pressures from hawkish Fed minutes, ETF outflows, and trade uncertainty. He described the move as consistent with Bitcoin’s historical volatility.

ETH Price Path to $5,000: How’ll it Pan Out

Ethereum’s approach toward $5,000 represented a key milestone for the token. Analysts said these factors distinguished Ethereum’s position within the sector, particularly as Ethereum hit a new record while Bitcoin stayed below the previous top.

Despite the drop in the past few hours, the combination of monetary easing expectations, expanding institutional treasuries, and structural adoption suggested Ethereum had established itself as the leading driver of token momentum in 2025.