Ether (ETH) hit a new yearly high of $4,108 on December 16, bringing it close to its all-time high.
ETH has gained 5% over the past week, posting a 25% gain in 30 days and a 75% gain over the past year. According to data from TradingView, ETH is currently trading at $3,839, down about 26% from its all-time high of $4,891 on November 26, 2021.
Now, with capital continuously flowing into ETH investment products and supporting fundamentals and on-chain data, the question is how high can ETH price go?
ETH Supply on Exchanges Drops Sharply
One factor supporting ETH prices is a significant drop in supply on exchanges. Data from on-chain market analytics firm CryptoQuant shows that ETH balances on exchanges have dropped to an 8.5-year low of just 9.2 million ETH, down nearly 10% over the past year.
ETH Supply on Exchanges | Source: CryptoQuant
Net inflows/outs from exchanges have shown a sharp decline since October 2023, when withdrawals spiked. This trend was accompanied by a 67% increase in ETH price during the same period.
Number of Ethereum Whales on the Rise
The drop in supply on exchanges is partly explained by increased accumulation by large investors in recent weeks.
Notably, whale wallet holdings have reached an all-time high, accounting for around 57% of all ETH in circulation.
“According to Santiment data as of December 16, there are currently 104 whale wallets holding at least 100,000 ETH, with a total value of approximately $333 billion,” the company shared on the X platform.
Meanwhile, wallets holding between 10 ETH and 100,000 ETH dropped to an all-time low of 33.5%, and wallets under 100 ETH accounted for just 9.19% of the total supply, the lowest level in nearly four years.
“The amount of ETH held by the largest whale group (holding 100,000 ETH or more) is now at a record high of 83.81 million tokens, while the asset price temporarily surpassed the $4,000 mark.”
Ethereum Supply Distribution by Tier | Source: Santiment
This shows that whales are not selling during the recent rally but continue to accumulate more, which could be a positive sign in the long term if this trend continues.
Meanwhile, the number of new daily Ethereum addresses averaged 130,200 in December, marking an eight-month high, according to data from Santiment.
Source: Santiment
Along with the increase in ETH price, the total open interest (OI) in the derivatives market also increased sharply, from 9.8 billion USD on November 5 to a record high of 20.7 billion USD on December 17.
ETH Open Interest Across All Exchanges | Source: CryptoQuant
Data shows that ETH OI has increased by 24% over the past seven days, reflecting high demand for ETH leveraged positions and new money flowing into the market.
Institutional Investment Demand for ETH Products Soars
In the US, spot Ether ETFs have seen positive inflows every day since November 22.
Notably, these investment products recorded their largest inflows ever on December 5, with over $428 million in inflows. During the week ending December 13, total inflows into these ETFs reached $854.8 million.
Ether ETF Spot Cash Flow | Source: SoSoValue
In total, Ether investment products have seen seven consecutive weeks of inflows, totaling $3.7 billion, according to CoinShares.
James Butterfill, Director of Research at CoinShares, commented that this is a “significant improvement” in investor sentiment towards ETH.
“Ethereum had its seventh consecutive week of $1 billion inflows, bringing the total inflows over the past seven weeks to $3.7 billion, reflecting a marked improvement in investor sentiment.”
If the positive sentiment from institutional investors continues, ETH prices could soon return to their all-time highs in November 2021.
Analysts Set Five-Digit Target for ETH Price
Data from TradingView shows that ETH is struggling to turn the key $4,000 resistance level into new support, setting the stage for new all-time highs.
“The battle at $4,000 continues,” popular crypto analyst Jelle wrote in a December 17 post on the X platform, adding: “If this level is broken, all predictions could be broken.”
ETH has been accumulating in a triangle pattern for over three years, setting the stage for “a new era,” Venturefounder analyst said.
He analyzed the two-week candlestick chart, which is part of a seven-year accumulation process, forecasting a price target of ETH above $15,000.
“Baseline scenario: Ethereum is likely to repeat the strong breakout it made in 2016-2017 to reach a new all-time high. Price target: $15,937 by May 2025.”
ETH/USD 2-week chart | Source: Venturefounder
“We are going to see a similar cycle to 2017 with a lot of upside potential,” said Michaell van de Poppe, founder of MN Capital, putting the cycle top for ETH between $15,000 and $25,000.
However, some other crypto market observers have more cautious predictions. VanEck predicts a cycle peak of $6,000 for ETH and $180,000 for Bitcoin in 2025.
Asset management firm Bitwise predicts that Bitcoin, Ether, and Solana (SOL) will reach $200,000, $7,000, and $750, respectively, by 2025.
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