Despite facing market pressure, Ethereum's bullish potential remains stable.
While the price of Ethereum rises, the number of active addresses has decreased. However, overall market activity suggests that the likelihood of a significant price drop is low, with the market currently positioned between neutral and bullish.
Ethereum [ETH] has attempted to be bullish multiple times over the past week, with asset prices rising close to the historical peak of $4,891.
However, the bullish momentum is difficult to maintain as the asset continues to decline, forming a new low, valued at $4,225 at the time of publication.
Notably, research from AMBCrypto suggests that despite the price drop, ETH bulls are still likely to regain control of the market and drive a sustained upward movement.
Whales retreat, but sharks have swallowed 4.4 million ETH.
The latest analysis from Alphractal shows that whales are exiting as they sell their holdings of ETH.
Whales are usually the largest holders of the asset, and as they sell off, their share of supply has been declining—this is a clear signal of selling pressure.
Historically, the correlation between ETH and Bitcoin indicates that when whales sell Bitcoin, another group—sharks—accumulates the asset, which often triggers a rebound.
These "sharks" hold between 10,000 to 100,000 ETH, and in this case, they have been continuously accumulating as the "whales" exit the market.
Over the past five months starting from April, this group of investors has siphoned off 4.4 million ETH from the market.
While the "sharks" continue to hoard coins, AMBCrypto also noted another bullish trend in the market. According to CryptoQuant, the total amount of Ethereum staked has been steadily rising.
The increase in staked assets indicates bullish market sentiment, as more and more investors are looking at long-term investments. Currently, the staked supply of ETH has surged to 36 million ETH.
The increase in exchange reserves has triggered cautious sentiment.
The ETH reserves of cryptocurrency exchanges have also increased. As of the time of writing this article, the ETH reserve at exchanges has reached 18.4 million.
Asset inflows to exchanges usually indicate impending selling pressure, as tokens become easier to liquidate once deposited through spot trading.
However, the analysis of spot trading activity indicates that based on the average order size in spot trading, order sizes remain normal, suggesting that there has been no surge in selling or buying currently.
Nevertheless, market dynamics seem to favor the bulls, especially with the increase in staking activity.
The surge in active addresses strengthens the bullish case for ETH.
Analysis of Ethereum addresses (both senders and receivers) shows a steady upward trend in their numbers.
As shown in the figure, by observing the changes in active addresses and the price of ETH, we can see that historically, the overall growth of activity is positively correlated with the surge in ETH prices.
Currently, address activity is surging sharply. If this upward trend continues, the price of ETH is likely to follow the same trajectory, supporting bullish recovery expectations.
