Ethereum Surges: 90% Deflation, 300% Transaction Growth, Institutions Buy $308M

Ethereum's Network Activity and Institutional Demand Surge Amid Market Growth

Ethereum's network activity and institutional demand have surged recently, transforming the cryptocurrency into a vibrant and renewable force. The surge is so pronounced that it is creating an estimated 80-90% deflationary pressure on Ethereum, making it an attractive investment opportunity.

Explosive Growth in Ethereum Transactions and Active Addresses

The exponential growth of Ethereum's scaling solutions, such as Arbitrum, Optimism, and Base, has been nothing short of stunning. Over the past few months, these networks' transaction volumes have surged by more than 300%. Increased user adoption and increased protocol activity across these networks are the primary drivers of that growth. This is all super bullish for Layer 2 Ethereum solutions, and consequently, it's bullish for the Ethereum network itself.

Key Support Levels and Institutional Investment in Ethereum

From an on-chain perspective, Ethereum's most critical support level is between $2,238 and $2,614. At this price range, a total of 12.18 million wallets hold 63.07 million ETH, amounting to a strong concentration of on-chain holdings. Roughly 5.33 percent of all Ethereum that exists is concentrated in this top price support level. A dip into this range would likely be met with a wave of buying, as these holders likely see themselves as "in the money." Thus, this price concentration provides a solid buffer against further declines for Ethereum's price, should it reach this region, making it a sort of price floor for the asset.

Ethereum's institutional demand has been building consistent momentum. On February 4, Ethereum spot ETFs recorded a net inflow of $308 million, marking the fourth consecutive day of seeing positive inflows. The sustained interest in Ethereum ETFs seems to indicate that large financial players are increasingly valuing ETH as a valuable asset. This is not much different from the institutional adoption narrative that Bitcoin has seen play out over the last couple of years through similar vehicles.

Institutions Accumulate ETH: Cumberland Withdraws $174 Million from Exchanges to Coinbase Prime

According to data from COINOTAG