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Ethereum (ETH), the second-largest cryptocurrency by market capitalization, appears to be in the spotlight as analysts monitor market indicators that indicate ETH's likely next move.
Recent data from CryptoQuant highlights patterns of accumulation and exchange-traded fund (ETF) inflows, detailing the potential trajectory of Ethereum, which has underperformed compared to Bitcoin in the current cycle. Masu.
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Analyzing trends in reserves and ETF inflows
In a series of posts shared on social media platform X, CryptoQuant analysts analyzed key metrics for Ethereum. One notable observation was the balance of Ethereum in accumulation addresses. These addresses currently hold approximately 19.5 million ETH, worth approximately $78 billion.
Ethereum balance on storage address. |Source: TradingView
For comparison, Bitcoin accumulation addresses hold approximately 2.8 million BTC, worth $280 billion. Bitcoin's dollar value of holdings is four times that of Ethereum, which is in line with its relative market capitalization and provides insight into investor behavior.
Another key indicator noted was the steady inflow into Ethereum-focused ETFs over the past few months. Notable spikes were recorded on several key dates, including $1.1 billion on November 11, 2024 and $839 million on December 4, 2024.
According to CryptoQuant analysts, these consistent inflows are a strong indicator of institutional buying interest, reinforcing Ethereum's growing appeal among large-scale investors.
Ethereum ETFs have been seeing steady inflows in recent months.
Main spikes:
November 11, 2024: $1.1 billion
November 21, 2024: $754 million
November 25, 2024: $629 million
November 27, 2024: $883 million
December 4, 2024: $839 million
These inflows reflect strong purchasing pressure. pic.twitter.com/OIwWNmRPYB
— CryptoQuant.com (@cryptoquant_com) December 10, 2024
Despite strong demand for ETFs, Ethereum's price movements this cycle have been less dramatic compared to Bitcoin's performance. Historically, Ethereum price peaks have followed Bitcoin, as seen during the 2021 bull market.
At the time, Bitcoin hit an all-time high (ATH) in March with an increase of 480%, and Ethereum hit an all-time high a few months later with an increase of about 1,114%. However, Ethereum appears to be underperforming in the current cycle, suggesting a change in market dynamics.
Taker volume and potential growth potential
Additionally, a key area of concern cited by analysts is Ethereum taker volume, which reflects market sentiment by comparing active buying and selling activity.
Ethereum taker seller volume. |Source: CryptoQuant
CryptoQuant reported that Ethereum taker-seller trading volume reached an all-time low of -400 million. This aggressive selling activity is reminiscent of the pattern observed before the 2021 ATH. While the current selling pressure may seem bearish, it could also indicate that the market is approaching an important pivot point.
Ethereum taker volume is at an all-time low.
The slump in Ethereum's price is due to the high volume of transactions between sellers, which is currently at an all-time low of -400 million, indicating active selling.
A similar pattern occurred before Ethereum’s May 2021 peak. Nevertheless, still… pic.twitter.com/OmRYvAzjxI
— CryptoQuant.com (@cryptoquant_com) December 10, 2024
Analysts emphasized that Ethereum's weak performance this cycle does not preclude its significant growth potential.
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The interplay of accumulation patterns, ETF inflows, and taker volumes suggests that Ethereum may still have upward momentum.
ETH price is rising on the 2-hour chart. Source: ETH/USDT on TradingView.com
Featured images created with DALL-E, TradingView charts
