Key Points
- Ethereum whales are accumulating tokens, indicating a potential supply squeeze and reduced selling pressure.
- Increasing daily transactions and interest from short-term holders suggest Ethereum’s next bullish phase is imminent.
Ethereum Set to Attract Significant Capital Inflows
Ethereum (ETH) is expected to be the next cryptocurrency to draw substantial capital inflows, as per a study by blockchain intelligence platform IntoTheBlock.
Despite not matching the recent gains of Bitcoin (BTC), which recently hit a record high of $99,261.30, Ethereum’s price is at $3,365.66, with a 24-hour trading volume exceeding $55 billion.
Ethereum could be on the brink of a bullish breakout, with certain metrics providing insight into its potential trajectory.
Growth in Daily Transactions and Whale Activity
The Ethereum network has seen a considerable increase in the number of transactions in recent months. Data from IntoTheBlock indicates that daily transactions have grown from 1.1 million to 1.22 million in the past three months.
This steady growth implies increased Ethereum network usage, potentially leading to more significant price activity.
Whale activity is another key indicator being tracked. Holders of at least 0.1% of Ethereum’s circulating supply are demonstrating a positive net flow, indicating their confidence in the asset.
This trend suggests accumulation by large investors, which has historically been associated with upward price movements.
Reduced selling pressure from these large holders suggests they may be anticipating further gains, a sign of optimism among institutional and high-net-worth investors who often influence significant market trends.
Short-Term Holders and Exchange Flows
Short-term Ethereum holders, those who have held the asset for less than a month, are also being monitored closely. An increase in these holders indicates renewed interest from retail investors.
Their activity could contribute to a bullish phase for Ethereum, especially if coupled with the ongoing confidence displayed by larger holders.
Another crucial metric is the average holding time of transacted coins. The holding time has increased to 11 months, reflecting reduced selling activity among Ethereum users.
This trend points to a supply squeeze, with fewer tokens being circulated in the market. A reduced willingness to sell often supports price stability and can create conditions for an upward price trajectory.
The movement of Ethereum tokens to and from exchanges is also being tracked as a potential signal of upcoming price action. A decrease in exchange inflows typically indicates accumulation, as investors move their holdings to private wallets rather than keeping them on exchanges for potential selling.
Ethereum’s exchange inflows remain low, suggesting that holders are choosing to hold rather than sell. This accumulation behavior aligns with expectations of a price increase in the near term, as demand may outpace supply.
