Ethereum's on-chain activity is drawing attention as whales accumulate ETH amid recent corrections. With increasing flows into Ethereum ETFs and strong network fundamentals, a move towards $4000 is likely. Timing is crucial, and the coming days may determine ETH's dominance resurgence in the market.
On-chain flow analysis reveals an undeniably clear trend: investors are massively withdrawing their Ethereum from trading platforms. According to data shared by analyst M. Crypto, this liquidity hemorrhage has continued for several months, including during the phase when ETH was reaching new all-time highs.
This systematic withdrawal typically reflects a strategic shift among holders. Rather than leaving their assets available for active trading, investors are opting for self-custody via private wallets or cold storage. This migration toward off-exchange storage mechanically reduces selling pressure on the spot market.
The correlation between these massive outflows and the current price correction phase deserves attention. Traders who realized profits between $4,500 and $5,000 now seem to be repositioning for medium to long-term holding. This behavior reflects an underlying conviction: despite short-term volatility, Ethereum’s bullish potential remains intact for the coming months.
Specific data from Binance, the largest Ethereum exchange by volume, perfectly illustrates this dynamic. Arab Chain, a blockchain analyst, highlighted a spectacular drop in reserves: the balance fell from its June-July 2024 peak to just 0.0327 in November, marking a six-month low.
This available supply contraction on the world’s leading exchange creates an interesting technical setup. Less ETH available on platforms means less immediately sellable liquidity. In a context where institutional demand continues to grow, particularly through spot ETFs, this scarcity could catalyze a price recovery.
However, the equation includes a key variable: network activity and real usage demand. Arab Chain emphasizes that stagnant on-chain activity could neutralize the positive effect of reduced exchange reserves, keeping the price in a sideways range in the short term. The $3,500 level currently represents a major psychological support that bulls must defend.
Ethereum’s market is clearly entering a phase of discreet accumulation. On-chain metrics converge toward a scenario where weak hands have been shaken out during the correction, while whales and long-term investors strengthen their positions away from exchanges.
This dynamic recalls patterns observed before price discovery phases. When supply contracts on trading platforms while increasing in cold wallets, the market finds itself in a situation of potential supply shock. All it takes is a fundamental or technical catalyst to trigger a significant rally.
The coming weeks will be decisive. Resistance levels to watch are located around $3,800 then $4,200. A clear break above these zones, accompanied by continued exchange withdrawals, could validate the scenario of a new bullish leg toward previous highs, or even beyond. Conversely, a break below $3,300 would require a reassessment of the market structure.
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