Ethereum surges 60% in May, but long-term holders offload

Ethereum's price surged by 60% in May, driven by a significant wave of accumulation totaling $3.42 billion. This rally propelled Ethereum past the $2,500 mark, peaking at $2,617 before experiencing a slight retreat. The Relative Strength Index (RSI) hovered around 67, indicating strong bullish momentum but remaining just below the overbought threshold.

Despite the impressive rally, long-term holders have begun to offload their Ethereum holdings, a trend that has raised concerns about the sustainability of the recent gains. According to data from Santiment, the Age Consumed metric has shown two significant spikes in long-term holder activity in recent days, marking the largest movements since October. This activity suggests that seasoned investors are taking profits near perceived local tops, which could indicate a shift in market sentiment.

The magnitude of these movements, the largest in seven months, has cast doubt on Ethereum's short-term outlook. If long-term holders continue to reduce their positions, the selling pressure could weigh heavily on Ethereum's ability to maintain its upward momentum. This uncertainty is further compounded by the recent pause in Ethereum's price action, which has seen a noticeable slowdown in price movement and a thinning of trading volume near the $2,509 level.

However, the overall sentiment towards Ethereum remains positive. Over the past month, more than 1.34 million ETH, worth upwards of $3.42 billion, has exited centralized exchanges. This significant reduction in available supply suggests that many investors are positioning for long-term holds rather than short-term trades. The sharp decline in exchange supply, coinciding with momentum from the Pectra upgrade, indicates a strong shift in investor behavior towards holding Ethereum for the long term.

As the market continues to evolve, it will be crucial for investors to stay informed about the latest developments in the Ethereum ecosystem. The recent rally and subsequent pause in price action highlight the importance of staying up-to-date with the latest news and analysis to make informed investment decisions. The decrease in exchange supply and the bullish sentiment among long-term holders suggest that Ethereum's long-term prospects remain strong, despite the recent pause in its upward trajectory.