The number of ETH validators has reached a two-year high, but Ethereum has fallen below a key support! The next step may test $3,500.

Despite the number of validators on the Ethereum (ETH) network rising to a two-year high in early September, and for the first time since July, the "number of additions exceeding the number of exits" turning point occurred, the ETH price unexpectedly fell below the key rise trend line and approached the 4,100 USD support level. On-chain data shows that institutions continue to increase their holdings of ETH, but the long positions liquidation wave in the futures market is intensifying short-term bearish pressure.

Surge in Validators: Institutional Funds Continue to Flow In

(Source: Validatorqueue)

According to Validatorqueue data, on September 5th, the Ethereum validators waiting queue reached 860,300 ETH, setting a two-year high, and for the first time since July, it exceeded the withdrawal queue (822,700 ETH). This change alleviated last month's market concerns about a massive redemption wave, when the redemption volume had soared to 1.05 million ETH on August 29th.

Analysts point out that the redemption wave in August is more due to the rebalancing of mortgage and lending investment portfolios, rather than simply profit-taking. Everstake stated on social media that the strengthened momentum of validators reflects the market's confidence in the Ethereum network upgrade and the attraction of ETH to institutional investors.

Institutional Increased Allocation to ETH Reserves

Statistics from Strategic ETH Reserve show that in recent weeks, multiple companies holding ETH reserves have steadily increased their positions, totaling 3.6 million ETH. On-chain data service provider Arkham pointed out that BitMine Immersion Technologies (BMNR) recently purchased over 80,000 ETH through over-the-counter transactions from a certain CEX exchange; SharpLink Gaming (SBET) announced on Tuesday an additional acquisition of 39,500 ETH.

These actions indicate that, despite short-term price pressure, institutions are still buying the dip and viewing ETH as a long-term strategic asset.

Technical indicators are weakening: key support level is precarious

(Source: Trading View)

According to TradingView charts, ETH failed to hold the rising trend line since June 22 after breaking through the $4,500 resistance, and is currently testing the $4,100 support level, which coincides with the 50-day simple moving average (SMA).

Coinglass data shows that in the past 24 hours, the total liquidation amount in the ETH futures market reached $80.9 million, of which long positions accounted for $68.6 million, indicating that longs have faced a heavy blow. In terms of technical indicators, the RSI fell back to neutral territory after failing to break through the moving average, while the Stochastic Oscillator fell into the oversold region, reflecting that bearish pressure is dominating the market.

Price Outlook: Rebound or Deep Fall?

If ETH can obtain support at $4,100 and rebound, it is expected to challenge the $4,500 level again in the short term; however, if it falls below that level, the market may quickly dip to the $3,500 region. Analysts remind that although the number of validators and institutional holdings are both increasing, the leverage liquidation in the derivatives market and macroeconomic uncertainties may still trigger a new round of selling pressure.

Conclusion

Ethereum is currently at a critical moment of divergence between fundamentals and technicals: the number of validators has reached a two-year high, and institutions continue to increase their positions, yet this has failed to prevent the price from falling below key support. Investors need to closely monitor the trend changes at the $4,100 support level, as it will determine whether ETH will restart its rebound or further drop to $3,500. For more real-time market data and on-chain analysis, please follow the official Gate platform.