Ethereum Analysts Predict ‘Upward Breakout’ as ETH Price Touches $3,000

Ethereum's price has successfully reclaimed the $3,000 mark on Monday, representing a 16% recovery from the downturn to $2,620 recorded on November 21. Analysts in the market have highlighted important data indicators suggesting that ETH is positioning itself for a potential breakout to even higher values.

Key Takeaways:

Ethereum whales have been aggressively accumulating tokens over the past six months.
Strong network activity and upcoming Ethereum scaling upgrades in January are supportive factors for ETH's growth.
Traders anticipate that a rise above the $4,000 barrier could lead ETH to reach new all-time highs.

Ethereum analysts see ‘upward breakout’ as ETH price returns to $3K

What’s Fueling Ether’s Recovery?

Ethereum whales exhibit confidence in the potential for a further rally, seizing the recent market pullback as an opportunity to gather more tokens. Analysis from CryptoQuant has uncovered a growing distinction between smaller retail wallets and larger investors.

Related: ETH approaches $3K after a favorable CPI report, but a $553M outflow from Ether ETFs raises concerns.

Whale wallets, those holding between 10,000 to 100,000 ETH, have accumulated over 22 million tokens in recent months. On the other hand, smaller retail and mid-tier investors have been net sellers, seeing a decrease in their holdings since 2024. This shift indicates a significant redistribution rather than speculative investments.

“Large whales typically don’t accumulate during a price rally; they buy when $ETH is undervalued before an upswing,” noted analyst CW in a Dec. 21 post on X, adding:

Ethereum: Balance by holder value

The increasing purchase rate among whales could indicate that the upcoming rally has the potential to reach all-time highs, CW remarked. This insight aligns with a notable decrease in ETH supply on centralized exchanges over the last six days, as reported by Glassnode.

The supply of ETH on exchanges plummeted by 45%, reaching a nine-year low of 10.2 million ETH on Sunday, down from 18.5 million ETH on July 1. A declining balance on exchanges usually suggests a reduced amount of available supply for quick sales, as more ETH is locked in smart contracts or moved to cold storage.

ETH balance on exchanges. Source: Glassnode

“$ETH supply on exchanges is declining rapidly,” analyst DustyBC Crypto pointed out in a recent post on X.

Ethereum’s Network Activity Gains Momentum

The network activity of Ethereum shows continued strength, with the number of active addresses increasing by 22% in the past week, according to data from Nansen. The average monthly transaction count also rose by 16% during the same timeframe, totaling 11.3 million.

Top blockchains ranked by seven-day AAs and transaction count, USD. Source: Nansen

Additional insights from Santiment indicate a significant increase in new wallets being created on the Ethereum network, with an average of 163,000 new addresses being opened daily in December, up from 124,000 in July.

Ethereum daily network growth. Source: Santiment

This uptick in activity is seen as a positive sign for the world’s second-largest cryptocurrency, according to Rananjay Singh. He noted that the ongoing number of transactions is at unprecedented levels, showcasing a solid uptrend in overall network demand.

ETH: Number of transactions. Source: Glassnode

As reported by Cointelegraph, Ethereum’s transaction throughput is expected to rise from 60 million to 80 million transactions in January, an adjustment that markets have yet to fully incorporate.

Experts Forecast Ether’s “Upside Breakout”

Latest data from Cointelegraph Markets and TradingView indicates that ETH is trading at $3,061, reflecting a 2.5% increase over the past 24 hours. According to prior reports, surpassing the $3,200 mark is crucial for ETH to unlock its upside potential, possibly leading to a rally towards $4,000.

“Ethereum appears to be gearing up for an upward breakout,” said Michael van de Poppe, founder of MN Capital, in his most recent ether analysis on X. He emphasized the importance of testing the critical resistance level, which could result in a breakout after several attempts.

Van de Poppe remarked that the altcoin is demonstrating a “clear uptrend,” signifying that buyers are increasingly willing to engage at higher price levels.

ETH/USD daily chart. Source: Michael van de Poppe

According to Bitcoinsensus, Ether remains in a bullish position within a “broadening channel structure,” which could see the ETH/USD pair trending toward the upper band of this model.

ETH/USD chart. Source: Bitcoinsensus

As reported by Cointelegraph, the 50-day Exponential Moving Average (EMA) at $3,150 represents a key level for bulls to surpass; breaking beyond this could potentially drive the ETH price towards $3,450 and subsequently $4,000.