Ethereum Sees Surge in Network Activity and Derivatives Buying Amid Whale Exits

Ethereum’s weekly transactions have increased by 40% since mid-December, suggesting rising on-chain demand for ETH. While decentralized exchange (DEX) volumes have declined since late September, Ethereum remains popular for asset transfers, signaling a shift in usage patterns. Open interest in ETH futures has risen from 10.9 million ETH in October to 13.4 million ETH in early January, indicating increased speculative activity.

Ethereum has maintained support above $2,800, with bulls optimistic about a potential move to $3,900 if momentum builds. Traders are closely watching the $3,120 resistance level as a key breakout threshold. On the downside, a breach below $2,800 could trigger a decline to $1,600.

Derivatives traders have flipped bullish, with Net Taker Volume turning positive on Binance for the first time since July. This suggests short traders may be covering positions and could signal a potential market bottom. However, this buying is partially offset by retail distribution and U.S. institutional selling pressure.

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Ethereum price remains in a consolidation phase near $3,100, with open interest in futures continuing to rise. Staking activity has removed significant ETH from circulation, which could support future price volatility if demand increases.

What Drives Ethereum’s Recent Transaction Surge?

The surge in Ethereum transactions can be attributed to rising asset transfers rather than DeFi activity. With weekly transactions reaching 14 million, the network is seeing increased utility. This trend aligns with higher open interest in futures and growing speculative demand.

However, the decline in DEX volumes since late September raises questions about the sustainability of DeFi usage on the platform. Analysts suggest that while DeFi remains a core feature of Ethereum, current growth is being driven by cross-chain transfers and settlement activity.

What Significance Do Whale Exits and Institutional Actions Hold for Ethereum?

An early Ethereum investor executed a full exit of 154,076 ETH, netting $274 million in profit. The staged distribution over months reflects calculated profit-taking rather than panic selling. This aligns with broader institutional caution, as seen in the negative Coinbase Premium Index.

Despite these exits, institutional investors have accumulated 4.1 million ETH, representing 3.39% of the total supply. Entities like BitMine and SharpLink continue to stake large amounts, indicating long-term confidence in Ethereum’s infrastructure.

The growing institutional footprint supports a bullish case for Ethereum, especially as staking yields and regulatory clarity enhance the platform’s utility. While U.S. institutional selling persists, broader economic activity and regulatory developments are seen as strong fundamentals.

What Risks and Opportunities Remain for Ethereum in the Near Term?

Ethereum remains within a narrow trading range, with open interest growing despite limited price movement. This suggests leverage rotation rather than position unwinding, which could lead to sharp price swings if a breakout occurs.

Technical indicators like the RSI and MACD suggest bearish momentum if Ethereum fails to break above $3,220. However, some analysts argue Ethereum is undervalued given the growth in on-chain activity and its robust infrastructure.

Market participants are watching key levels like $3,080 and $3,120 for directional clues. A sustained recovery above $3,200 could signal a return to bullish momentum, while a breakdown below $2,800 could trigger further declines.

Institutional selling and whale exits highlight the complexity of Ethereum’s current market dynamics. While short-term uncertainty remains, long-term fundamentals, including growing utility and regulatory support, suggest potential for a price recovery.