Ethereum Price Set for Potential Rally to $7K Amid Whale Investor Decline
Ethereum (ETH) is poised for a potential parabolic phase following a bullish fourth quarter in 2024. The altcoin has a fully diluted valuation of approximately $416 billion and a 24-hour average traded volume of around $20 billion, as it attempts to break out of a macro-falling logarithmic trend.
Price Analysis
On the weekly timeframe, Ether rebounded from the 50 Moving Average (MA). For the daily timeframe, it needs to reclaim the 50 MA as support and have the Relative Strength Index (RSI) rise above 50% to negate the recent market correction. A loss of support above $3,300 could trigger another selloff before a parabolic cycle begins, with solid support anticipated above $3,000.
Long-term bullish indicators include the formation of a cup and handle pattern on the weekly chart. Additionally, the ETH/BTC pair is showing signs of reversal after three years in a falling logarithmic trend.
$ETH in preparation for breakout pic.twitter.com/yvircnKZJY
— Mikybull 🐂Crypto (@MikybullCrypto) January 3, 2025
Ethereum Supply Dynamics
While Bitcoin (BTC) supply on centralized exchanges is at a multi-year low, Ethereum's supply has increased since early 2025. Market data from CoinGlass indicates that Ethereum's supply on CEXes rose by over 415K within 24 hours, reaching approximately 15.79 million.
The demand for Ether from US spot ETFs has declined significantly, with a net cash outflow of about $77 million reported recently, primarily from Bitwise’s ETHW and Grayscale’s ETHE. However, other US spot Ether ETFs did not experience losses, resulting in a cumulative net inflow of about $2.5 billion and total net assets around $12.4 billion.
Fundamental Strength
The Ethereum network leads the web3 space, boasting over $67 billion in total value locked (TVL) and a stablecoin market cap of around $112 billion. Despite competition from other layer one blockchains like Solana (SOL), Ethereum continues to attract institutional investors.
The upcoming Ethereum Pectra upgrade will allow External Owned Accounts (EOAs) to operate like smart contracts, enhancing scalability. Increased interest in Ether staking among institutional investors positions Ether for significant growth in the coming months.