Ethereum (ETH) has been trading within a range, hovering around $3,295.8, despite a major Bitcoin (BTC) surge to a new all-time high (ATH) of $109K over the weekend. This upward movement in Bitcoin sparked gains in many altcoins, but Ethereum has remained somewhat stagnant, with its value down 0.99% on January 22 from a daily high of $3,366.9. However, a closer look at on-chain data, whale accumulation, and technical analysis reveals a potentially bullish outlook for Ethereum, suggesting a breakout to $4,000 could be on the horizon.
Whale Accumulation and Network Growth Support Bullish Sentiment
On-chain metrics point to significant bullish signals. Ethereum’s Network Growth indicator, which tracks new wallets joining the network, spiked to 180K after hovering around 90K for several months. This surge suggests new capital is flowing into ETH, with investors keen to buy at current levels. A similar trend occurred in May 2024 when Ethereum dropped to $3,100 before soaring 34%, making it likely that Ethereum is nearing a bottom.
In addition to network activity, whales (high-net-worth traders) have been accumulating ETH at a rapid pace. Non-exchange addresses holding ETH have increased from 52 million in March 2024 to 66 million by January 2025. At the same time, ETH held on exchanges has decreased, reinforcing the belief that ETH may be preparing for an upward move.
A Bullish Technical Setup: Will Ethereum Reach $4,000?
The technical outlook for Ethereum is equally promising. A falling wedge pattern is emerging on Ethereum’s four-hour chart, signaling a potential 17% rally to $4,000. This target is derived by adding the height of the wedge to the breakout point of $3,400. Given the strong whale accumulation and growing network activity, Ethereum could be positioned for a sharp rally.
Also Read: Ethereum Price Outlook: Staking, DeFi Moves, and Key Support/Resistance Levels for 2025
Key Support Levels to Watch
Ethereum’s price action will depend heavily on support levels at $3,057 and $3,132. A break below these levels could lead to a price drop of 13% to 15%, with a target of $2,657. However, with bullish on-chain data and technical patterns aligning, Ethereum looks primed for a breakout rally toward $4,000.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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