Ethereum returns to $3k: whales gather before they break

Ether (ETH) price regained the $3,000 level on Monday, a 16% return from its multi-month low of $2,620.

Main Receptors:

Ether whales have been stockpiled significantly over the past six months.

Strong network activity, Ethereum scaling improvements in January are a tailwind for ETH.

Once the barrier at $4,000 is breached, traders expect ETH to rise to higher levels.

What is behind the ether regeneration?

Ether whales have used the recent reversal to stock up on more signals and have been optimistic about the prospect of a further rally.

CryptoQuant data shows a growing gap between retail-sized wallets and large-scale investors.

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Well wallets with a balance of 10,000-100,000 ETH hold more than 22 million tokens, after a rapid accumulation over the past six months.

Meanwhile, retail and mid-cap investors are net sellers, with their holdings declining from 2024 onwards. This implies redistribution rather than speculative inflows to these wallets.

“Big whales holding more than 10K don't accumulate in a single rally. They only rally when $ETH drops before the rally starts,” analyst CW said in a Sunday post on X.

And they have increased their holdings significantly since July, indicating that they expect a $ETH rally.

The all-time high in whaling “means the upcoming rally has the potential to be an all-time high,” CW added.

This corresponds to a significant drop in ETH supply on central exchanges over the past six days, according to Glassnode data.

From the 18.5 million ETH exchange on July 1, the supply decreased by 45% to a nine-year low of 10.2 million ETH.

The decline in exchange balance suggests a smaller supply that can be sold immediately, as more ETH is locked up in smart contracts or moved to cold storage.

In a recent X post, analyst DustyBC Crypto said, “The supply of $ETH on exchanges is rapidly decreasing.”

“Supply Shocking Income.”

Ethereum network activity goes back

Ethereum network activity continues to show strength, active addresses have increased by 22% in the last seven days, according to Nansen data.

Average monthly transaction count grew by 16 percent to 11.3 million over the same period.

Additional data from Santiment shows an increase in new wallets created on the Ethereum network, with an average of 163,000 new addresses per day in December, compared to 124,000 in July.

Responding to Ethereum's network growth, Rananjay Singh said, “This is a clear development for the world's second largest crypto network activity.”

“Adoption is quietly picking up.”

The number of transactions continues to be at a high level, indicating a general improvement in network demand.

According to Cointelegraph, the transaction volume of the Ethereum network is set to increase from 60 million to 80 million in January, which the market may still be worth.

Analysts expect an “inverted breakout” of Ether.

Data from Cointelegraph Markets and TradingView shows ETH trading at $3,061, up 2.5% in the last 24 hours.

According to Cointelegraph, breaking $3,200 is key to ETH's potential and has set up a rally towards $4,000.

“Ethereum is building to an upside,” MN Capital founder Michael Van de Pop said in an Ether analysis on XX.

The analyst said, referring to the $3,100-$3,200 resistance, which rejected the recovery attempts earlier this month, “another critical resistance test, which means that after this test level, a crash may occur.”

According to van de Pop, the altcoin is showing “clear growth” upwards, which is a sign that buyers are willing to enter at higher and higher levels.

“I think it will go higher and the next target zone for that will be $3,650-3,700.”

According to Bitcoinsensus, Ether remains bullish in a “broad channel structure”, which could see the ETH/USD pair begin to pull towards the upper band of the pattern.

“A potential upside target is set at around $7K.”

As Cointelegraph reports, the 50-day exponential moving average (EMA) at $3,150 is a critical level for bulls to beat, as a break above it could push the ETH price to $3,450 and later to $4,000.

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