- Ethereum experienced a 5% surge, surpassing key resistance levels as on-chain activity and whale accumulation intensified.
- Although exchange inflows increased, the strength in price indicates that there is strong demand absorbing profit-taking pressure.
Ethereum [ETH] has once again grabbed the spotlight with a 5% surge, outperforming Bitcoin in a significant breakout!
As we delve into the data to determine the sustainability of this momentum, valuable insights emerge regarding the factors propelling the rally and the potential future direction of ETH.
Ethereum’s momentum surges
Ethereum’s price action has captured attention once more. After a brief dip, ETH made a strong recovery, climbing nearly 5% in a single day and decisively closing above the recent resistance level around $2,730.
Source: TradingView
On May 27th, Ethereum’s daily chart displayed a bullish engulfing candle, followed by a series of green candles, signaling robust upward momentum.
Unlike Bitcoin, which saw a 2.86% decline, Ethereum’s trend is gaining momentum, supported by increasing volatility, making it stand out in the market.
Whales active as on-chain activity peaks
Source: Santiment
On-chain activity on the Ethereum network surged sharply in mid-May, with daily active addresses surpassing 500K.
Source: Santiment
The surge in demand wasn’t limited to retail investors – wallets holding 10,000 to 100,000 ETH significantly increased their holdings during the rally, indicating renewed confidence from mid-sized whales.
Meanwhile, the largest wallets (1 million – 10 million ETH) reduced their holdings by May 29th, suggesting redistribution or profit-taking.
The combination of rising address activity and selective whale accumulation suggests that the network is gaining momentum, with smart money positioning itself ahead of key catalysts.
Changes in supply and sentiment
In early May, Ethereum’s price broke above $2,200 and continued its ascent towards $2,700, accompanied by a spike in exchange inflows – a notable change in investor behavior.
Historically, increasing inflows indicate growing sell pressure, especially when paired with a price rally.
Source: CryptoQuant
The uptick in deposits suggests profit-taking or hedging by short-term holders.
Nevertheless, the ongoing price rally despite these inflows indicates robust underlying demand, likely absorbing sell pressure from institutions or long-term investors.
If inflows continue without disrupting the uptrend, it could signify a matured rally driven by deep liquidity rather than short-term speculation.
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