TLDR
Ethereum’s price has recovered to around $2,540, up 55% in the last month after a 45% decline in Q1
Exchange supply has hit an all-time low below 4.9%, indicating reduced selling pressure
Approximately $3.8 billion in capital has flowed into ETH since the May 7th Pectra upgrade
Whale wallets have accumulated over 450,000 ETH in the past month
Technical indicators suggest the market may be overheating, with RSI at 69 approaching overbought territory
Ethereum’s price has surged to around $2,540, marking a strong recovery from April lows. The second-largest cryptocurrency has shown remarkable resilience after falling to approximately $1,385 in April, climbing over 55% in just one month.
The recent price action comes amid several positive on-chain indicators. Data from analytics platforms shows that Ethereum’s supply on exchanges has dropped to an all-time low, falling below 4.9% for the first time in its history.
This historic low exchange supply represents a dramatic shift in investor behavior. More than 15.3 million ETH have been withdrawn from exchanges over the last five years, with much of this reduction attributed to the rise in ETH staking following the Ethereum 2.0 upgrade.
The reduced exchange supply has important implications for Ethereum’s price dynamics. With fewer tokens available for spot selling, the selling pressure that typically causes sharp price drops during market corrections has decreased.
On-Chain Metrics Show Strong Accumulation
Behind this price recovery, on-chain data reveals substantial accumulation by large holders. Whale wallets holding between 10,000 and 100,000 ETH have accumulated over 450,000 ETH in the last month alone.
These large-scale acquisitions coincide with the shrinking exchange balances and the overall price increase since early April. Institutional interest has also been growing, with U.S.-based Ethereum exchange-traded funds seeing $108 million in net inflows over the past month.
A major institutional player, London-based asset manager Abraxas Capital, purchased 350,703 ETH worth about $837 million between May 7 and May 20. This substantial investment further demonstrates growing institutional appetite for the asset.
The Pectra upgrade, which went live on May 7, appears to have catalyzed new capital inflows. Data from Glassnode shows that Ethereum’s Realized Cap has climbed from $240.8 billion on the day of the upgrade to $244.6 billion currently, indicating around $3.8 billion in new capital entering the market.
This upgrade introduced several improvements to the ETH network, including staking enhancements and increased transaction capacity. While the upgrade has succeeded in attracting new investment, network activity metrics show mixed results.
Since the upgrade, the average number of new and resurrected addresses has decreased compared to year-to-date values (-1.8% and -8.4% respectively). However, address churn is lower as well (-8.5%), suggesting increased engagement among existing Ethereum users despite fewer new participants.
Technical Outlook and Potential Price Direction
Technical indicators suggest the market may be approaching an overheated state. The relative strength index (RSI) currently sits at 69, just below the overbought threshold of 70 – a level that often precedes short-term corrections.
Despite this warning sign, momentum remains positive with all major moving averages pointing upward, from the 10-day to the 200-day. This indicates strong underlying support even as current price action shows signs of stalling.
If Ethereum fails to break through the $2,700 resistance level, analysts suggest it may retreat to the $2,300-$2,350 range where support is forming. A more substantial correction could see prices approach $2,100.
Conversely, a strong breakout above $2,700 on high volume could continue the rally, especially if accompanied by positive market developments. Some analysts point to $3,000 as the next major target if current momentum continues.
A key catalyst approaches on June 1st, when the U.S. Securities and Exchange Commission is expected to decide on including staking in ETH ETFs. Allowing institutions to earn yield from these regulated products could trigger a new wave of demand.
The technical picture shows that a Golden Cross has recently been confirmed on ETH’s 12-hour chart. A clean breakout from this formation could open doors to higher price targets, particularly if Bitcoin maintains its momentum toward a new all-time high.
With favorable on-chain trends and increasing institutional interest, Ethereum’s price action in the coming weeks will likely be closely watched by investors looking for signs of whether this recovery marks the beginning of a larger bull run or a temporary bounce before further consolidation.
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