Although it spiked slightly over the weekend, Ethereum failed to sustain its growth beyond $2,600. Following this, the digital currency dipped to $2,400 but then recuperated, finding its way back up to $2,600 once more.
As an analyst, I’m now observing signs that hint at a temporary retreat might occur before we witness a potential breakthrough.
Cooling Period Before Breakout
The Ethereum market is exhibiting indications of becoming too hot due to its proximity to the $2.5K barrier for resistance. A significant increase in trading activity, as evidenced by the high volume, suggests heightened interest and engagement.
Indeed, as per the latest findings from CryptoQuant, the significant rise is primarily due to profit-taking and the availability of substantial untouched supply at this crucial psychological threshold. Given Ethereum’s current overheated state, analysts are predicting a temporary adjustment or correction, which may provide some relief and allow the market to stabilize before further growth potential kicks in.
In essence, it’s anticipated that Ethereum will carry on with its period of stability, or consolidation, until there’s a new push for demand that overcomes the current resistance levels in the near future.
As an analyst, I’m observing that although short-term indicators seem to point towards a cooling period in the market, long-term investors are persistently amassing the altcoin.
Long-Term Conviction
The amount of Ethereum found on centralized exchanges has reached a decade-low, largely due to increased hoarding by institutional investors and major holders. According to Santiment’s recent report, just 4.9% of the entire ETH supply is now held in trading venues, which marks an all-time low. Over the last five years, about 15.3 million Ether have been removed from these platforms.
As an analyst, I’ve noticed a significant shift in Ethereum (ETH) behavior over the past month. Data from CryptoRank.io indicates that over a million ETH were withdrawn from exchanges, hinting at a preference among users to hold ETH for long-term rather than trade it. This trend is further supported by on-chain data, which reveals that ‘whales’ or wallets containing more than 10,000 ETH have amassed approximately 450,000 coins since late April. As of May 10th, these whales collectively held around 40.75 million ETH, marking the highest level since March, suggesting a buildup in long-term investment.
Over the last week, Ethereum-related investment products experienced a welcome relief, with inflows amounting to approximately $205 million. This influx came as investor trust was restored following the Pectra upgrade, leading to a renewed sense of confidence. As a result, the year-to-date total has now reached $575 million.
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2025-05-21 09:39