The Ethereum market shows burgeoning institutional interest, but the asset’s price performance remains tied to the broader cryptocurrency market, with Bitcoin as the main influence. Several recent events have occurred that may signal a change in investor behavior around Ethereum—one that could shift the asset’s long-term price trajectory in a positive direction, though, as we will see, this is not at all a guarantee. These events include: increasing “whale” activity; a historic shift in Ethereum from centralized exchanges to decentralized means of exchange; and increased illiquidity for Ethereum as an asset. Growing Whale Activity and Shrinking Exchange Reserves One of the most reliable signs of investor confidence in Ethereum is the recent uptick in whale activity. Since February 1, the ranks of Ethereum whales holding 10,000 ETH or more have swelled by 2.30%. This rise in whale numbers points to an accumulation trend, as high-net-worth individuals or institutions continue to scoop up impressive amounts of ETH. Such activity is the very definition of a long-term bullish outlook. These investors are betting on sustained Ethereum growth, no matter how many price dips or reversals the network might endure in the short term. The number of #Ethereum whales holding over 10,000 $ETH has risen by 2.30% since February 1, signaling growing accumulation! pic.twitter.com/Mc09dY5XaW — Ali (@ali_charts) February 11, 2025 Along with this increase in whale holdings, Ethereum achieved a historic moment between February 8 and 9 and saw around 224,410 ETH moved off exchanges in just 24 hours. This occasion marks the largest net withdrawal from exchanges in the last 23 months. When large sums of cryptocurrency are withdrawn from exchanges, it usually means that investors aren’t looking to sell any time soon. Instead, they’re content to hold their assets and often have a long-term view of the investment. There was a historic milestone of ~224,410 ETH moving away from exchanges in the 24 hours between February 8th and 9th. This was the most amount of net coins moving off of known exchange wallets in a single day in 23 months. Though more of a long-term metric, this is a… pic.twitter.com/G2e2AausPh — Santiment (@santimentfeed) February 11, 2025 The large-scale outflow of Ethereum from exchanges decreases the supply of Ethers available for trading. This makes the chance of a near-future, substantial selloff, where a large number of Ethers are sold at once, less likely. For the price of Ethereum, this is a good thing. A fewer number of coins available to be sold on the open market means the price is under less downward pressure than it otherwise might be. Long-Term Confidence Despite Short-Term Struggles Although Ethereum’s movement away from exchanges shows a growing confidence in the cryptocurrency, it does not change the fact that Bitcoin will play a huge role in Ethereum’s price actions in 2025. Bitcoin is still the larger and more influential cryptocurrency. It leads the market in terms of moves either up or down. If it starts moving up, then generally most of the other coins in the market will follow; if it starts crashing down, then again, most of the other coins will also follow with it down. So, can Bitcoin stabilize and head back up toward its all-time high? In the past few months, Bitcoin has encountered numerous obstacles to meeting the demands of the associated institutional and retail investors who closely monitor its volatility and signs of market correction. Should Bitcoin mount an effective counteroffensive and push its price back up, then Ethereum stands to gain significantly, pulling in prospective investors as it looks to Ripple past the $2 Mark. However, if Bitcoin maintains its current trend and, in fact, digresses further, then Ethereum’s ecosystem indicators probably won’t impact its price appreciably. Ethereum’s ETF Activity and Market Outflows Along with the movements of whales and diminishing exchange reserves, the Ethereum spot ETF has experienced some wild swings in recent weeks. On February 10, the total net outflow from the Ethereum spot ETF was $22.46 million. While this does represent a one-day record number of outflows, we must keep in mind that not all flows out of an ETF mean “get ready for the rocket down.” In fact, not long before this, we had a hefty inflow of $9.18 million on February 8. Nonetheless, the spot ETF seems to be having a tough time of it, and the market seems to have decided that it doesn’t want to hold way too much in Ethereum for the short term. Still, the increasing presence of Ethereum whales and the significant pullback of ETH from exchanges suggest that long-term believers in the asset abound. On February 10, Bitcoin spot ETFs had a total net outflow of $186 million. BlackRock ETF IBIT had a single-day net inflow of $55.3647 million. The Ethereum spot ETF had a total net outflow of $22.4573 million. https://t.co/59u0BnEqLG — Wu Blockchain (@WuBlockchain) February 11, 2025 That so many investors are pulling their ETH back from exchanges and are apparently holding it for the long term is, in my book, a much more Ethereum-positive indicator than the price going up. If this trend continues, and with EIP-1559 and ETH 2.0 in our future, it could lead to a supply situation that makes major sell-offs much less likely and the price much more stable. The Road Ahead for Ethereum Ethereum’s present market conduct indicates a shift in investor sentiment toward the positive. An increasing number of whale investors are accumulating ETH, and a historic amount of ETH is leaving exchanges. These factors unambiguously suggest a growing long-term confidence in ETH, even as its price struggles in the short term. The key to ETH’s overcoming what appears to be a most recent accumulation of downside price pressure lies in the performance of BTC. If BTC can perform, and perform meaningfully, over the next few months, we should expect ETH to follow suit and also perform. The next few months will be critical for the price direction of Ethereum. If the coin can keep on accumulating and keep its coins off exchanges, it might be set up for a price rebound, with or without the latest boost to Bitcoin’s price. The broader market still carries a lot of uncertainty, though, and a price rebound that stays rebounding for Ethereum will probably require at least some in-market stability as it threatens to break free of market-wide trends weighed down by other altcoins. These developments hold promise for Ethereum investors. Whale activity is up, and so are exchange withdrawals. That paints a hopeful picture at the moment—maybe enough hope for Ether investors to push the price back in the direction of the sun and away from the increasingly bearish storm clouds that had been hovering over it. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news ! Image Source: thomaseder/ 123RF // Image Effects by Colorcinch
