What happened?
Global M2 money supply has surged to record highs while Ethereum exchange reserves have fallen sharply, signaling less selling pressure on ETH. Crypto analysts and hedge funds say this mix of more liquidity, big ETF inflows, and staking demand could push Ethereum into a “revaluation” phase. Technically, ETH is testing key resistance near $4,800, with $7,000–$10,000 cited as possible upside if it breaks out.
Who does this affect?
Retail and institutional crypto investors are on the front lines: they’ll benefit if ETH captures the liquidity wave but could get hit if it fails at resistance. Stakers and long-term holders stand to gain from reduced exchange supply and rising institutional demand, while short-term traders and highly leveraged positions face bigger downside risk. Portfolio managers and DeFi projects may also see rotation of capital into altcoins if Bitcoin dominance continues to fall.
Why does this matter?
If expanding M2 and shrinking exchange reserves funnel money into crypto, an Ethereum breakout would likely reprice the broader market and shift leadership from Bitcoin toward ETH and altcoins. That would accelerate ETF flows, staking demand, and DeFi activity, lifting liquidity and valuations but also increasing volatility and speculative pressure. On the flip side, a failed breakout around $4,800 could trigger a retracement to $3,500–$3,800, showing the market still depends on sustained institutional demand and macro liquidity conditions.