Ether’s (ETH) price reclaimed the $3,000 level on Monday, a 16% rebound from the $2,620 multimonth low reached on Nov. 21. Market analysts pointed to key data metrics that suggest that ETH is “building up for breakout” to higher highs.
Key takeaways:
Ethereum whales accumulated aggressively over the last six months.
Robust network activity, Ethereum scaling upgrades in January are tailwinds for ETH.
Traders expect ETH to rally to all-time highs once the barrier at $4,000 is broken.
What’s behind Ether’s rebound?
Ethereum whales remained confident about the prospects of a further rally, using the recent pullback to accumulate more tokens.
Data from CryptoQuant revealed a growing divergence between retail-sized wallets and large investors.
Related: ETH nears $3K after cool CPI print but $553M Ether ETF outflow raises alarm
Whale wallets with a balance of 10,000-100,000 ETH hold over 22 million tokens, after rapid accumulation over the last six months.
Meanwhile, retail and mid-sized investors have been net sellers, with their holdings on the decline since 2024. This points to redistribution rather than speculative inflows into these wallets.
“Large whales holding over 10K do not accumulate during a rally. They only accumulate when $ETH is undervalued before the rally begins,” said analyst CW, in a Dec. 21 post on X, adding:
“And they have significantly increased their holdings since July, indicating that they expect an $ETH rally.”
The fact that the whale buying rate has reached all-time highs “means that the upcoming rally has the potential to be an all-time high level,” CW added.
This aligns with a sharp decrease in ETH supply on centralized exchanges in the past six days, according to data from Glassnode.
The ETH supply on exchanges dropped by 45% to a nine-year low of 10.2 million ETH on Sunday from 18.5 million ETH on July 1.
A declining balance on exchanges suggests less supply that can be immediately sold, as more ETH is locked up in smart contracts or moves to cold storage.
“$ETH supply on exchanges is dropping fast,” said analyst DustyBC Crypto in a recent X post, adding:
“Supply shock incoming.”
Ethereum’s network activity bounces back
Ethereum’s network activity continues to show strength, with active addresses increasing by 22% over the last seven days, according to Nansen data.
The average monthly transaction count has also increased by 16% over the same period to 11.3 million.
Additional data from Santiment reveals a surge in new wallets created on the Ethereum network, with an average of 163,000 new addresses per day in December, up from 124,000 in July.
This is a “a clear rise in network activity for the world’s second‐largest crypto,” said Rananjay Singh in response to Ethereum’s network growth adding:
“Adoption is quietly picking up.”
The number of transactions continues to be at all-time high levels, signalling an overall uptrend in network demand.
As Cointelegraph reported, Ethereum network transaction throughput is set to increase from 60 million to 80 million in January, which the market may have yet to price in.
Analysts expect Ether’s “upside breakout”
Data from Cointelegraph Markets and TradingView shows ETH trading at $3,061, up 2.5% over the last 24 hours.
As Cointelegraph reported, breaking $3,200 is key to ETH’s upside potential and sets the stage for a possible rally to $4,000.
“Ethereum is building up for a breakout upwards,” said MN Capital founder Michael van de Poppe in his latest Ether analysis on X.
“Another test of the crucial resistance, which would mean that a breakout, after this amount of tests, is likely to occur,” the analyst said, referring to the $3,100-3,200 resistance, which rejected recovery attempts earlier this month.
Van de Poppe said that the altcoin was making a “clear uptrend” on the upside, a sign that buyers are willing to step in at higher and higher levels.
“I would assume that this is going to break to the upside, and the next target zone would be $3,650-3,700 for that.”
According to Bitcoinsensus, Ether remains bullish within a “broadening channel structure,” which could see the ETH/USD pair start to gravitate to the upper band of the pattern.
“The upward potential target sits right around $7K.”
As Cointelegraph reported, the 50-day EMA at $3,150 is a critical level for the bulls to overcome, as a break above could propel ETH price toward $3,450 and later to $4,000.
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