Ethereum‘s price soared to its highest point of the year, reaching $4,065 after a 3.5% rise over the past day. This surge coincides with Bitcoin‘s impressive 4.4% increase, which recently saw it enter the $72,000 range. Over the past week, Ethereum’s value has appreciated by 16%, closely mirroring the 15% uptick seen by Bitcoin in the same timeframe. Enthusiasts attribute this growth to significant investors accumulating more Ethereum in anticipation of further price hikes.
Investor Confidence Bolsters Ethereum’s Growth
Data indicates an uptrend in Ethereum holdings, specifically among major investors. Analytics from Santiment show a rise in the proportion of wallets holding substantial amounts of Ethereum — those containing 10 to 100 million units have grown from 27% to over 30% since the year’s start. Similarly, the segment holding 1 to 10 million has also spiked in the past five days.
Coinciding with investor accumulation, Ethereum deposits to exchanges have dwindled. Glassnode reports a marked decline in deposit transactions as Ethereum’s value first exceeded $3,200 and continued to fall as prices climbed past $3,500. This trend often signals a bullish market sentiment, as it suggests a reduced likelihood of imminent selling.
Supporting this view, large volumes of Ethereum are moving away from exchanges to private wallets, implying a preference for holding over trading. For instance, high-value transactions flagged by Whale Alert indicate significant amounts of Ethereum being transferred to unknown wallets from prominent exchanges like Bybit and Binance.
Ethereum Supply Contraction Adds to Demand
The decreasing supply of Ethereum on exchanges isn’t the singular reason for its heightened demand. Reports from Ultrasound Money highlight a considerable quantity of Ethereum being burned over the last week, which effectively reduces the cryptocurrency‘s available supply and eases selling pressure. Additionally, a significant portion of Ethereum, amounting to more than 31.65 million units, has been staked in the Beacon Chain of its proof-of-stake layer, removing a large swath of the circulating supply from the market. This is complemented by the growth of liquid staking solutions like Lido, which now represents a sizable chunk of all staked Ethereum. As a result, the total value locked in such Ethereum liquidity solutions has skyrocketed, illustrating the increasing interest in Ethereum-based financial protocols.