Ethereum (ETH) has shown signs of recovery after a significant market downturn, with increased whale activity causing large Ether holders to withdraw funds from exchanges.
After experiencing a nearly 15% drop following the Federal Reserve's interest rate cut decision, Ethereum appears to be finding stability near the $3,400 level.
This stability may be due to investors seizing the opportunity to buy in when prices drop, as suggested by the outflows from exchanges.
The ETH reserve chart on exchanges shows a declining trend, indicating a consistent pattern of investors withdrawing ETH from exchanges, signaling an accumulation phase.
Source: CryptoQuant
The price of this altcoin has dropped more than 22.5% during the tumultuous market period, breaking through the critical support level of $3,500. However, since then, it has regained a significant position, recovering from around the 200 EMA line at $3,100 to above $3,400 at the current time. Analysts suggest that the next support level to watch is $2,850.
The surge in activity in the Ethereum market signals growing interest.
Amid the current correction, investors are rushing to buy ETH, with some expressing optimism that this asset will return to the $4,000 level.
The LookOnChain analysis platform reported that ten newly created wallets collectively withdrew 17,698 ETH, worth approximately $61.66 million from Binance.
A few hours ago, LookOnChain also revealed that four newly activated whale wallets had purchased 8,440 ETH worth $28.43 million from Binance. This large transaction coincided with the time ETH's price recovered after a sharp decline.
Institutional interest in Ethereum has also surged, evidenced by market activity from World Liberty Finance, linked to Donald Trump, which recently purchased 759 ETH worth $2.6 million at current valuations.
The optimistic sentiment surrounding Ethereum is further reinforced by the continuous increase in staked ETH. According to data from IntoTheBlock, there are currently over 54.7 million staked ETH, supported by more than 206,000 unique stakers. This trend suggests that investors are optimistic about the long-term outlook for ETH, committed to holding their positions in the near future.
Ether ETFs have also recorded strong performance, noting seven consecutive weeks of net inflows. Recent data shows record inflows of $1.6 billion just in December.
Nate Geraci, president of The ETF Store, emphasized the importance of these developments in a post on December 20 on X, stating that the net inflow into ETH is 'keeping pace with gold ETFs.' He also predicted that capital inflows will accelerate in the future.
Analysts predict that the upward trend could last until 2025, especially if the strong spot price performance of ETH increases ETF profitability. Furthermore, regulatory approval to generate profits from staking ETFs could amplify the appeal of ETH.
A bright future for Ethereum.
Despite recent market volatility, long-term forecasts for Ethereum remain optimistic. Some analysts predict that this asset will peak at $8,800, while more cautious estimates, such as those from asset management firm VanEck, suggest a cycle peak of $6,000.
VanEck also predicts that the price of Bitcoin will reach $180,000 by 2025, indicating a strong upward trajectory even if Ethereum does not significantly outperform Bitcoin.
The resurgence of Ethereum occurs after it traded around $4,000 before losing momentum. The current recovery phase demonstrates ETH's resilience, with both whales and retail investors taking advantage of the price dip to accumulate tokens.
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