Ethereum price today: $3,330
- The Ethereum Foundation announced that it will allocate 50,000 ETH to participate in DeFi activities.
- The announcement follows criticism that the Foundation only uses the Ethereum blockchain to sell its holdings.
- Ethereum could rally 20% to test $4,093 resistance if it overcomes a key descending trendline hurdle.
Ethereum (ETH) is trading around $3,330 on Monday following the crypto market’s overall decline resulting from traders’ reaction to United States (US) President Donald Trump’s failure to mention the crypto during his inauguration. However, the top altcoin could have a positive year after the Ethereum Foundation allocated 50,000 ETH to the decentralized finance (DeFi) ecosystem in response to criticism surrounding its sales activity.
Ethereum Foundation responds to criticism with 50,000 ETH DeFi allocation
Ethereum Foundation announced in an job that he had allocated 50,000 ETH from his treasury to begin participating in the DeFi ecosystem – starting with a test transaction on the Aave lending protocol.
This follows criticism the Foundation faced earlier on Monday for selling an additional 100 ETH. Most members of the crypto community claimed that the Foundation only used the Ethereum blockchain to sell ETH, pointing to the $13.3 million in sales it had made over the past year.
Angel investor Eric Conner suggested that the Foundation invest a portion of its holdings in ETH to cushion the effect of its sales activity and cover expenses.
However, Ethereum co-founder Vitalik Buterin responded that the Foundation had historically chosen not to participate due to concerns over regulatory risk and being forced to choose sides in the event of a controversial hard fork.
Historically, the concerns have been (1) regulatory, (2) if EF puts us on the line, that de facto forces us to take a position on any future controversial hard forks.
(1) is lower than it was before, (2) remains. There are certainly ways to minimize (2), and we have recently explored them.
– vitalik.eth (@VitalikButerin) January 20, 2025
He noted that while regulatory risks have been reduced, the Foundation continues to explore ways to address the second challenge.
Additionally, Tim Beiko, who leads core protocol meetings at Ethereum, pointed out that staking the remaining balance of the Ethereum Foundation’s treasury – ~269,000 ETH – at the current average annual yield of 3% would only yield around 8,000 ETH, worth around $26 million. . This represents less than 20% of the Foundation’s total spending of $134.7 million in 2025.
“I am all for using the chain and staking when it makes sense (…), but staking would not cover all FE expenses, and (in my opinion) it would be unwise to leveraging ETH treasury to cover payroll,” Beiko wrote.
However, with the allocation of 50,000 ETH to DeFi, the Foundation could begin to grow its ETH holdings by earning on a wide range of yield generation opportunities.
Latest updates come after Buterin announcement that the Foundation is undergoing “major changes” in its management structure, which include, among other things, the arrival of new talent and improving the level of technical expertise.
Meanwhile, Ethereum ETFs saw net inflows of $246 million last week, according to CoinShares data.
Ethereum Price Forecast: ETH could rebound 20% to $4,093 if it overcomes descending trendline resistance
Ethereum saw nearly $180 million in futures liquidations over the past 24 hours, according to Coinglass data. The total amount of long positions liquidated is $133.52 million, while short liquidations accounted for $46.45 million.
On Monday, the top altcoin continued to consolidate between $3,200 and $3,500 after bouncing off the $3,216 support level.
Notably, ETH faces resistance near the 100-day simple moving average (SMA) and a descending trendline extending from December 16. If ETH breaks through this resistance, it could overcome the $3,776 hurdle and rebound to test its ten-month high resistance near $4,100.
ETH/USDT 8-hour chart
However, a rejection from the descending trendline could lead ETH to find support near the $3,216 level. If this support fails, the psychological $3,000 level could prevent further decline.
The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) momentum indicators have risen above their neutral levels, indicating increasing bullish momentum.
A daily candlestick closing below $2,817 will invalidate the thesis.
Ethereum FAQ
Ethereum is a decentralized open source blockchain with smart contract functionality. Its native currency, Ether (ETH), is the second largest cryptocurrency and the leading altcoin by market capitalization. The Ethereum network is designed to create crypto solutions such as decentralized finance (DeFi), GameFi, non-fungible tokens (NFT), decentralized autonomous organizations (DAO), etc.
Ethereum is a decentralized public blockchain technology, where developers can create and deploy applications that work without the need for a central authority. To facilitate this, the network leverages the Solidity programming language and the Ethereum Virtual Machine which helps developers create and launch applications with smart contract functionality.
Smart contracts are publicly verifiable codes that automate agreements between two or more parties. Basically, these codes automatically execute coded actions when predetermined conditions are met.
Staking is a process of earning yield on your inactive crypto assets by locking them into a crypto protocol for a specified duration to help keep it secure. Ethereum moved from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) consensus mechanism on September 15, 2022, in an event dubbed “The Merge.” The merge was a key part of Ethereum’s roadmap to achieve a high level of scalability, decentralization and security while remaining sustainable. Unlike PoW, which requires the use of expensive hardware, PoS lowers the barrier to entry for validators by leveraging the use of cryptographic tokens as the foundation of its consensus process.
Gas is the unit of measurement for transaction fees that users pay to transact on Ethereum. During times of network congestion, gas can be extremely high, forcing validators to prioritize transactions based on their fees.
