The cryptocurrency market traded mostly high this week, led by Bitcoin and Ethereum, with other cryptocurrencies, including Cardano, XRP, and AVAX, also showing heightened price movements. LINK emerged as a big gainer, trading at $20.42 after a 10.16% gain in the past day and a remarkable 27.12% gain in the past week.
Nevertheless, market observers have attributed this stability to a confluence of fundamental and technical factors including the apparent reducing pressure on BTC earlier caused by Grayscale dumping.
Ethereum, in particular, has been garnering attention for its price strength. Notably, the crypto asset’s price has been holding above the crucial yearly support at $2,160 since December 2023, sparking optimism among experts regarding its performance in the coming months.
Earlier on Monday, crypto analyst Ali Martinez provided a key indicator shedding light on the origins of Ethereum’s strength. In a tweet, the pundit highlighted how, over the past three weeks, approximately 510,000 ETH, valued at around $1.22 billion, has been withdrawn from cryptocurrency exchange wallets. Notably, exchange wallet balances have now plunged to an all-time low, with roughly 7 million ETH being withdrawn since April 2023.
Holders see this exodus of Ethereum from exchanges as a strategic move, reflecting a desire to secure assets ahead of potential market shifts.
“This significant outflow indicates a strong Ethereum holder sentiment and potentially less selling pressure in the market,” wrote Martinez.
In recent weeks, data provided by ‘Whale Alert’ has indicated that whales are orchestrating large-scale withdrawals. Today, the firm spotlighted a significant transfer of 13,999 ETH, equivalent to $32.3 million from Binance, to an undisclosed wallet. Another whale transferred 12,599 ETH worth $29 million from the same exchange to an unknown destination.
That said, these developments come even as optimism grows around the possible approval of a spot Ethereum ETF, scheduled for May. If approved, the ETF could mark a pivotal moment for Ethereum, attracting institutional and retail investors who increasingly view the cryptocurrency as a viable alternative to Bitcoin. Notably, Standard Chartered Bank has recently forecasted a potential Ethereum value surge to approximately $4,000 in the lead-up to the ETF approval.
Meanwhile, apart from optimism surrounding the ETF and the potential ETF approval, the market is also abuzz with anticipation for Ethereum’s forthcoming Dencun upgrade. This upgrade, promising to reduce Layer 2 transaction costs on Ethereum and boost ecosystem growth, further adds to the cryptocurrency’s positive sentiment.
As the week unfolds, investors will closely watch how these developments will shape Ethereum’s trajectory in the coming weeks. At press time, Ethereum was trading at $2,746, having experienced a surge of 15.85% over the past 7 days.
