Institutions Buy the Dip as Ethereum Tests Multi-Month Low

• The Ethereum price correction shows a key support test at the multi-month support triangle pattern, threatening a potential breakdown ahead.
• BitMine Immersion Technologies expanded its ETH reserves by over 35,000 tokens in the past week.
• Trend Research increased leveraged exposure through Aave-backed borrowing and spot ETH purchases.

On Tuesday, January 20th, the crypto market witnessed another wave of selling pressure as US-EU trade war continued to weaken investors sentiment. As a result, the Ethereum price dives below the $3,000 mark, registering an intraday loss of 6%. While the sell-off has liquidated retailers in the derivative market, the institutional investors continue to build their position. Will diverge bolster ETH coin to drive a sustainable recovery?

BitMine and Trend Research Ramp Up ETH Exposure Despite Market Drawdown

Since last week, the Ethereum price has witnessed a notable drawdown from $3,400 to $3,000, accounting for 12% loss. The downturn aligns with broader market pullback as the U.S.-EU tariff threats fueled risk-off sentiment in the crypto market.

With today’s price drop, the long position traders witnessed a total liquidation of $365.8 million, further fueling the sell-orders in the derivatives market. As a result, the open interest tide to ETH’s futures contracts also retraced to $40.31 billion. Along with forced liquidation, the downtick may also indicate traders are withdrawing their exposure ETH, reducing the speculative force in the market.

Major institutional players continued to add more Ethereum to their hoards despite retail hesitation in recent market conditions.

The one linked to Fundstrat’s Tom Lee known as Bitmine (or BitMine Immersion Technologies) increased its Ethereum reserves by more than 35,000 tokens in the previous week. This addition raised its total holding to around 4.2 million ETH, which has a valuation of around $12.9 billion based on current prevailing rates of around $3,067 per token (based on holdings data and market levels closer to $3,000).

Separately, an investment group called Trend Research did further leveraged purchases via decentralized lending. It used the Aave protocol to raise another 30 million USDT, and they then directed the funds to Binance to buy Ethereum – that’s about $9,900 ETH at today’s rates of around $30 million of Ethereum. Following that step, the acquired tokens were provided back to Aave as collateral, releasing an additional 20 million USDT borrowing. Those proceeds transferred to Binance, indicating intent to continue to buy.

On-chain records show that Trend Research’s overall Ethereum exposure is now about 637,000 tokens or $1.98 billion worth.

These moves are interesting in showing sustained interest in Ethereum on a large scale by sophisticated participants, despite the more cautious overall trader sentiment.

Ethereum Price Seeks Support at Multi-Month Support

The Ethereum correction extended to an intraday low of $2,875, retesting a long-awaited support trendline. The ascending slope is also recognized as the base support of a symmetrical triangle pattern in the daily chart.

The chart setup consists of two converging trendlines, which drive a short-term consolidation phase in price before deciding on its next trend. The current retest to the bottom support shows bolstered ETH with renewed bullish momentum to counter broader market selling pressure.

If the support holds, the coin price could rebound 11% and challenge the pattern’s resistance trendline. A potential breakout from this barrier will accelerate buying pressure to drive renewed recovery sentiment in price.

However, the momentum indicator RSI has plunged to 40% accentuated the intense bearish momentum in price, suitable to push for downside breakdown. If the Ethereum price breaks below the bottom support with the sellers would strengthen their grip over this asset for a prolonged downtrend.