Ethereum Gains Momentum: Key Metrics Signal Bullish Outlook

As Bitcoin (BTC) consolidates near its recent highs, attention has shifted to Ethereum (ETH), which remains 36.2% below its 2021 all-time high of $4,878. According to the analytical platform IntoTheBlock, Ethereum has historically benefited from profit rotations following Bitcoin’s price surges. On-chain data reveals mixed signals, but several metrics suggest Ethereum could be positioned for a significant move.

Rising Transaction Activity

According to platform findings, the daily transaction count on the Ethereum network has been increasing marginally. The average has gone up to 1.22 million as compared to a three months ago average of 1.1 million. Although this growth is rather slow, it shows a constant increase in the network activity which is a key factor of demand for ETH.

However, the daily new Ethereum addresses are still not as high as during previous bull markets. This is most probably because of the growing use of Layer 2 technologies like Base. However, all these solutions are still built on Ethereum and hence, Ethereum remains the king in this ecosystem.

Whale Accumulation Increases

Whales’ activity has been very pronounced with large investors buying more than $1.4 billion of ETH in the last week. This behaviour shows a long term optimism and hence, there is no panic selling of the asset. The same could be said of inflows into Ethereum spot ETFs, which have surpassed $147 million.

Analytical platform CryptoQuant data indicate low selling pressure in the market. Rising outflows indicate investors are transferring their ETH to inactive wallets, signaling long-term holding rather than trading activity.

Another important indicator, Ethereum’s leverage ratio, has fallen to 0.40 from a high of 0.430 in early November. These declines could mean a reduction in speculative investment, a development that would better support long-term growth.

Retail Interest Signals Volatility

Transaction volumes have risen but are not as high as they were during earlier bull markets. Additionally, short-term holders have grown in number, which often signals heightened retail interest but could also lead to volatility. As of press time, Ethereum is trading at $3,350, showing a 7.14% increase over the past day.

If Bitcoin continues to consolidate at its current levels, Ethereum could be poised for a breakout. Analysts anticipate potential resistance levels at $4,000 and $6,000, with a long-term bullish scenario projecting highs of $10,000. Ethereum remains a key asset to watch as the market adapts to ongoing shifts and development.