Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
The price of Ethereum is showing indications of a fundamental pattern that frequently precedes strong price spikes: persistent and extensive accumulation by whales removing coins from exchanges. Most significantly, just two hours ago, whale address 0x1fc7 withdrew an additional 1,900 ETH from Binance, which is approximately $4.86 million, and staked it.
This action is not unique; in just the last three weeks, this address has accumulated 6,989 ETH, or about $17.5 million, subtly lowering Binance's liquid supply. This type of recurrent withdrawal is something to be very aware of. If demand increases, there is a greater chance of a supply shock since the tradable float decreases when whales routinely withdraw coins from centralized exchanges.
If more investors adopt this strategy, thin order books have the potential to cause disproportionate price movements on comparatively small volumes. In the past, extended rallies have frequently been preceded by significant net outflows of Ethereum from exchanges, especially Binance, the biggest ETH trading platform. Ethereum has been consolidating between roughly $2,400 and $2,700 for the past few weeks according to the price chart, following a robust rebound from its April lows.
The fact that ETH is still above the 50-day and 100-day moving averages, which are currently grouped around $2,400 and $2,500, is noteworthy even though it has not yet broken out of this sideways range. The rising 200-day moving average below indicates longer-term momentum stabilizing, while the RSI — which is at 55 — indicates neither overbought nor oversold conditions.
Technically speaking, the market is waiting for a catalyst, as evidenced by this coiling price action. That might be the case if whales continue to accumulate and the amount of available exchange supply declines. In the event that staking rates rise and the supply on Binance and other major exchanges continues to thin out, traders should anticipate a sharp increase in price volatility.
In this regard, ETH's stability at $2,500 in spite of weak spot volume may be the quiet before the storm. Investors should keep an eye on both on-chain movements and price behavior around the resistance level of $2,700. If a breakout occurs while supplies are still limited, there is a greater chance that the price will rise sharply toward $3,000+.
Vladislav Sopov
U.Today Editorial Team