Even though Ethereum’s (ETH) price has not produced the gains that holders would hope for, recent data shows that investors holding the altcoin have remained resilient and optimistic. This could be surprising, especially as the Ethereum Foundation, which has been at the helm of selling ETH, has liquidated some assets again.

While the sale initially sparked valid concerns, this analysis explains why holders are unfazed by the development.

Another Sale Leaves Ethereum Holders Unfazed

Earlier today, the Ethereum Foundation sold 100 ETH for $262,474. This sell-off is just a little part of the coins the foundation has let go over the last few months. According to Spot On Chain, the total number of ETH sold this year has reached 3,766.

With an average price of $2,777, 1,250 ETH were sold in September, valued at $3.06 million. In total, the foundation sold 3,766 ETH in 2024, with the total value reaching $10.46 million. 

This consistent selling trend could indicate strategic profit-taking or cover operational costs, but it may also impact Ethereum’s market supply and price moving forward.

However, according to the Net Unrealized Profit/Loss (NUPL), ETH holders appear optimistic about the coin’s potential. Based on Glassnode’s data, NUPL is the sentiment investors have about a cryptocurrency. 

This perception ranges from capitulation (red), hope (orange), optimism (yellow), belief (green), and euphoria (blue). As seen below, ETH holders are in the optimistic region, indicating confidence in a higher price for the cryptocurrency.

Read more: How to Buy Ethereum (ETH) and Everything You Need to Know

Beyond that, the Historical In/Out of Money shows that the ratio of holders in profit has risen from 60% on September 16 to 64.37% today. The HIOM, as it is commonly called, shows the level of unrealized gains or losses in the market.

If the level of unrealized losses increases, it derails investors’ confidence. However, since unrealized profits have risen recently, more investors might be encouraged to buy ETH, and this could drive the price higher. 

ETH Price Prediction: Ready to Break $3,000

A look at Ethereum’s weekly chart revealed that the Commodity Channel Index (CCI) had increased. The CCI is a technical indicator that measures the difference between the current price and the historical average value. 

When it increases, the asset’s price has a good chance of moving upward. A decrease in the CCI, on the other hand, indicates weakness. With the altcoins price at $2,632, a further rise in the CCI could bring about ETH’s run toward $3,255.

Read more: 9 Best Places To Stake Ethereum in 2024

However, if the indicator fails to rise above the signal line at the midpoint, Ethereum could drop.  In that scenario, the coin’s value might decline to $2,301.

The Financial Services Agency (FSA) will conduct a comprehensive review of Japan’s crypto laws, seeking to possibly loosen regulations and even lower capital gains taxes. However, unexpected election developments may impact the process.

The Liberal Democratic Party (LDP)’s new candidate has made few public statements on crypto, but industry figures are disappointed.

A Reclassification for Crypto

Bloomberg reported this upcoming review on September 30, claiming that the FSA is mainly aiming to assess Japan’s existing Payment Services Act.

Essentially, the goal of this review is to determine whether crypto should be regulated as a payment option, as it is currently, or an investment tool. An anonymous official claimed that Japan mostly uses crypto for the latter purpose, and this may change the entire legal paradigm.

Japanese crypto trading has been recovering throughout 2024, and a number of specific measures may help boost it further. Obviously, the most enticing possible change is a lowered tax on crypto gains, from as high as 55% to 20%, similar to stocks. The FSA has also mentioned increased consumer protection, and business leaders have called for looser restrictions.

Read more: Crypto Regulation: What Are the Benefits and Drawbacks?

The demands from business leaders may prove especially salient to the FSA’s conclusions. Major corporations like Japan’s largest bank have already worked on a stablecoin since 2023, but they aren’t alone.

This year, electronics conglomerate Sony made headlines by acquiring an exchange. If Japan’s largest firms support relaxed measures, the FSA may listen.

Japan’s Election Shake-Up

A notable complication in the FSA’s survey is the upcoming election in Japan. Prime Minister Fumio Kishida is unable to seek re-election, and his constituency has made an unexpected choice for his successor: Shigeru Ishiba.

While Ishiba has expressed support for continuing previous economic policies, his selection follows a series of significant disagreements with his party, the LDP.

“If crypto had a vote, we would want Takaichi. She wants to continue ‘Abenomics’ which means more money printing and toleration of a weak yen,” prominent crypto entrepreneur Arthur Hayes claimed.

One of Ishiba’s first public statements as Kishida’s chosen successor has been to declare a snap election. As President of the LDP and presumptive new PM, Ishiba will dissolve the lower house of Parliament and hold an election on October 27. Kishida has been a valuable ally to Web3, but Ishiba has made few public statements on his own crypto policies.

Bloomberg quoted an FSA official who claimed that there are no clear conclusions on the length of the survey. However, he did state that is will likely last through the winter. In other words, it will certainly be ongoing when the election takes place, and Japanese stock markets have already wobbled since Ishiba became the new party leader.

Read more: Top 9 Crypto Friendly Countries For Digital Assets Investors

There are huge possibilities from this FSA study, but a bullish future for crypto is not guaranteed. If Ishiba loses or discontinues his predecessor’s pro-crypto policies, some opportunities for regulatory friendliness may be squandered. Still, as of yet, the FSA’s study has hardly begun, and it’s premature to make too many concrete predictions.