Ethereum (ETH) Breaks $4,000: Whale Activity and Liquidity Squeeze Fuel Bullish Momentum
Ethereum (ETH) has surged past the $4,000 mark for the first time since December 2024, signaling a strong bullish trend. This upward movement is supported by a significant decline in exchange reserves and increased institutional interest.
Key Highlights:
Exchange Reserves at Historic Lows: Data from CryptoQuant indicates that only 18.8 million ETH remain on centralized exchanges, the lowest level since 2016. This reduction suggests that investors are moving their holdings off exchanges, potentially leading to a supply squeeze.
Institutional Accumulation: Over the past month, institutions and whales have accumulated more than 1.035 million ETH, valued at approximately $4.17 billion. This buying spree coincided with ETH's price increase from $2,600 to over $4,000, reflecting strong institutional confidence.
Technical Breakout: ETH's breakout above the $3,860 resistance level propelled the price to $4,017, marking a 14.87% weekly gain. The 50, 100, and 200-week Simple Moving Averages (SMAs) are aligning below the market, reinforcing the bullish trend.
Outlook:
If ETH maintains its position above the $3,860 support level, it could target its all-time high range of $4,800–$4,900. However, traders should be cautious of potential pullbacks, as the Relative Strength Index (RSI) on shorter timeframes is nearing overbought territory.
In summary, Ethereum's recent price action is driven by decreasing liquidity and increasing demand from institutional investors, setting the stage for potential new highs.
Note: Always conduct your own research and consider your risk tolerance before making investment decisions.
