Ethereum Price Drops to $4,100 Amid Market Pressure
Ethereum (ETH) fell 6% on Friday after Kerrisdale Capital revealed a short position on BitMine Immersion (BMNR). Kerrisdale criticized the crypto treasury model as outdated and ineffective. The firm warned that ETH could drop to $3,500 if it loses support at the 100-day Simple Moving Average (SMA).
Kerrisdale Capital Shorts BitMine Over Falling Premiums
Investment firm Kerrisdale Capital said it shorted BitMine, an Ethereum treasury company. In a statement on Wednesday, Kerrisdale said BitMine copied a Bitcoin treasury model used by other firms. However, BitMine’s frequent stock issuance has tired investors, who now expect each price rise to trigger more supply.
Kerrisdale noted that BitMine’s Ethereum per share growth is slowing. The net asset value (NAV) premium is shrinking as the company issues more shares. BitMine stopped updating share counts in its weekly reports, making it harder to track.
The firm criticized BitMine’s recent $365 million stock offering. Kerrisdale said the deal focused on short-term cash, hurting long-term trust. It contrasted BitMine’s approach with MicroStrategy’s Bitcoin treasury. Unlike MicroStrategy’s Michael Saylor, BitMine’s Executive Chairman Thomas Lee lacks strong investor appeal.
Kerrisdale added that the rise of many corporate crypto treasuries has flooded the market. This oversupply reduces scarcity and investor interest. The firm said the public treasury model “no longer works” as NAV premiums fall. Many crypto treasury stocks now trade at or below their asset values.
BitMine’s share price dropped over 7% on Friday amid a broad crypto market decline.
Ethereum Price Outlook: Key Support at 100-Day SMA
Ethereum futures saw $171.3 million liquidated in one hour during US midday trading. Total 24-hour liquidations reached $237.9 million, according to Coinglass data. This followed ETH testing the $4,100-$4,000 support near the 100-day SMA.
ETH held this support during declines on June 22 and September 25. If it falls below the 100-day SMA, ETH could drop to $3,500. On the upside, resistance lies near a descending trendline above the 50-day SMA.
Technical indicators show weakness. The Relative Strength Index (RSI) and Stochastic Oscillator are below neutral levels. The Stochastic is close to entering oversold territory.
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