Cryptocurrency Market Update: Decrease in Ethereum Holding Accumulation, Increase in Profitable Holders - Predicting Future Trends
Ethereum, the second-largest cryptocurrency by market capitalization, is exhibiting a bullish outlook despite a high percentage of holders already being in profit and a dip in the holder accumulation ratio. This positive trend can be attributed to several key factors.
Institutional Adoption and Large Accumulations
Significant institutional interest, as evidenced by firms like SharpLink Gaming purchasing over 77,000 ETH, signals growing corporate confidence. This accumulation by well-researched, risk-evaluated actors supports a bullish market sentiment beyond retail holder behavior.
Macroeconomic and Geopolitical Developments
The easing of global risk due to events like a U.S.-EU trade deal reduces uncertainty, encouraging investment inflows. Coupled with low market volatility and expected policy decisions from the Federal Reserve and the Bank of Japan, these macro conditions create a favorable backdrop for ETH appreciation.
Strong Network Activity and Fundamentals
Increasing Ethereum network activity, including Total Value Locked (TVL) in DeFi and rising staking post-upgrades, point to robust ecosystem demand. High Ethereum ETF inflows and reduced circulating supply on exchanges further bolster demand-side dynamics.
Price Momentum and Technical Signals
Recent sharp price surges and bullish technical setups generate positive market sentiment and attract further buying interest. The price move above last week's high marked a breakout past a short-term range, and the $452 million inflows on the 25th of July marked the 16th consecutive day of positive netflows for ETH spot ETFs.
Historically, Ethereum tends to make a local high when the percentage of supply in profit exceeds 95%. Currently, the percentage of Ethereum supply in profit is at 98.1%. This high institutional demand, combined with the current bullish outlook, might not be negatively affected by the dip in holder accumulation ratio or the high percent supply in profit.
The Chaikin Money Flow (CMF) reading was 0.0, indicating a lack of strong buying pressure over the past couple of days. However, the Moving Average Convergence Divergence (MACD) underlined the bullish momentum behind the breakout.
Ethereum has risen by 4.09% over the weekend and has defended the $3,700 support level, climbing above the $3,860 local high from July 21st. The next resistance level for Ethereum is at $4.1k.
If the historical precedent of the 2020-2021 bull run is repeated, Ethereum might have another six months to trend higher. However, it is hinted that network accumulation might not be the primary factor driving the recent Ethereum rally. Instead, institutional demand, improved macroeconomic environment, fundamental network growth, and technical momentum are driving optimistic market expectations for 2025 and beyond.
- SharpLink Gaming's purchase of over 77,000 ETH indicates growing institutional interest in Ethereum, underpinning a bullish market sentiment beyond retail holder behavior in the crypto finance sector.
- Macroeconomic and geopolitical developments, such as the U.S.-EU trade deal easing global risk and low market volatility, combined with expected policy decisions from central banks, create a favorable backdrop that fosters ETH appreciation.
- Strong network activity and fundamentals, including increasing Ethereum network activity, rising staking post-upgrades, high Ethereum ETF inflows, and reduced circulating supply on exchanges, point to robust ecosystem demand for this altcoin.
- The recent sharp price surges in Ethereum, bullish technical setups, and positive netflows for ETH spot ETFs suggest that Price momentum and technical signals are driving optimistic market expectations for Ethereum's future, potentially even beyond 2025.
