Ethereum (ETH), the leading altcoin, finally broke through the $4,000 barrier on December 7, after months of hovering just below this milestone. The breakthrough was driven mainly by an influx of retail investors who accumulated over $1 billion worth of ETH in the past week. At its peak over the weekend, Ethereum touched a high of $4,100 before consolidating around that level. It has faced a slight correction of 0.8% in the past 24 hours and is currently trading at $3,950.
The rise in price has pushed Ethereum’s market cap to an impressive $475 billion. The asset has also seen an increase of 21% in its daily trading volume, reaching $24.5 billion. This data comes from the analytics platform IntoTheBlock, which also showed the largest exchange net outflow of almost 104,000 ETH occurred on December 4.
Interestingly, the large holder-to-exchange net flow ratio is currently at negative 0.65%, indicating that retail investors have been more active than whales. It’s worth noting that the Ethereum large holder inflows dipped to a one-month low of 197,160 ETH on Sunday, resulting in a net outflow of 4,550 ETH from whale addresses. This could be indicative of a potential whale selloff, which can often trigger a short-term correction.
One of the primary catalysts for Ethereum’s surge was the spot ETH exchange-traded funds (ETFs) in the U.S. These investment products recorded a net inflow of $836.8 million last week. Coupled with this, the Ethereum’s decentralized finance (DeFi) sector recorded robust growth, with the total value locked in ETH DeFi hitting $77 billion on Monday – a level not seen since April 2022.
Predicting Ethereum’s next move is a complex task. The declining whale activity could trigger fear, uncertainty, and doubt (FUD) among retail investors, potentially leading to a correction before another significant surge. However, renowned crypto analyst, Crypto Rover, has drawn parallels between Bitcoin’s breakout to $100,000 and the current Ethereum price action.
Yet, as the past four years of BTC and ETH price movement show, investor sentiment and macroeconomic changes can often steer the volatile crypto market in unexpected directions. As always, readers are reminded that the content and materials provided are for educational purposes only and should not be considered as investment advice.
Ethereum’s recent breakthrough is a testament to the growing importance of retail investors in the crypto market. The coming weeks will reveal whether this momentum can be sustained or whether the altcoin is due for a correction.
