Ethereum Price Surges 2% as Whale Investors Drive Net Outflows

Ethereum (ETH) experienced a 2% increase on Friday, driven by significant buying activity from “whales” leading to a net outflow of 230,000 ETH from exchanges, the highest since early March. Accumulation from major holders increased, likely for staking. Meanwhile, the firm Abraxas Capital has also withdrawn ETH, following a profit-taking phase earlier in the week. Active addresses have grown post-Pectra upgrade on May 7, while trading volumes have dipped, potentially indicating a consolidation phase ahead.

Ethereum (ETH) marked a notable 2% gain on Friday, signalling a return of investor enthusiasm, particularly from whales. Notably, there was a net outflow of approximately 230,000 ETH from exchanges, the largest single-day outflow since March 7. This movement suggests strong buying pressure, as seen in the Exchange Net Flow data from CryptoQuant.

When it comes to who’s behind these movements, a significant portion of the buying pressure can be traced to investors holding between 10,000 and 100,000 ETH. According to the ETH Supply Distribution metric, this group accumulated around 520,000 ETH since Wednesday, likely diverting most of it toward staking protocols. This uptick in staking aligns with a bullish trend that has been evident since May 6.

Adding to this narrative is the digital asset investment firm Abraxas Capital, which has significantly contributed to the outflows. Data from Lookonchain indicates that the firm has removed a total of 278,639 ETH from exchanges since May 7. These large withdrawals come on the heels of a price dip between Wednesday and Thursday, during which investors locked in about $1.5 billion in profits from ETH’s recent price rally.

Active addresses on the Ethereum network have been on the rise since the Pectra upgrade on May 7, illustrating a growing interest in the platform. The Pectra upgrade introduced various enhancements, including smart wallet capabilities, improved Layer 2 network scalability, and updates aimed at validators. This increased activity could further bolster ETH’s position in the market.

In the last 24 hours, Ethereum has experienced approximately $53.65 million in liquidations across futures markets. Of that total, about $27.01 million came from long positions, with $26.68 million from shorts, as reported by Coinglass. Amid this volatility, after facing a rejection at the $2,750 mark, ETH has found support around the key level of $2,530. The 200-day Simple Moving Average (SMA) now poses a resistance that, if surpassed, could challenge the $2,850 psychological barrier.

Despite the slight gain on Friday, trading volumes for ETH have tapered off to levels not seen since late April. Should this low volume trend continue while ETH maintains the $2,530 support, we might witness a consolidation phase like that between April 23 and May 7. However, if ETH fails to hold this support, it risks dropping to the $2,260 to $2,100 range.

Interesting to note is the performance of both the Relative Strength Index (RSI) and the Stochastic Oscillator (Stoch), which are currently in overbought territory but showing a downward trend. This indicates a shifting sentiment among traders, suggesting that bullish enthusiasm might be waning as ETH navigates the current market landscape.