The price of Ether (ETH) returned to the $3,000 level on Monday, a 16% rebound from the multi-month low of $2,620 reached on November 21. Market analysts have pointed to key data indicators that suggest ETH is “taking a pre-breakout rally” towards higher highs.

Key takeaways:

• Over the past six months, ethereal whales have been gathering aggressively.

• Good network activity, Ethereum scaling updates in January are a tailwind for ETH.

• Traders expect ETH to surge to record highs once the $4,000 barrier is breached.

What’s behind Ether’s bounce?

Ether whales remained confident in their prospects for further growth, using the recent pullback to accumulate more tokens.

Data from CryptoQuant shows a growing divergence between retail portfolios and gigantic investors.

Related: ETH is approaching 3 thousand. dollars after tepid CPI print, but the outflow of $553 million ETF Ether raises alarm

Whale wallets with a balance of 10,000-100,000 ETH hold over 22 million tokens after rapid accumulation over the last six months.

Meanwhile, retail and mid-market investors are net sellers and their holdings have been dwindling since 2024. This indicates redistribution rather than speculative inflows into these portfolios.

“Large whales with over 10k do not accumulate during the rally. They only accumulate when the dollar value of ETH is undervalued before the rally begins,” the CW analyst said in a post on X on Sunday, adding:

“And since July, they have significantly increased their holdings, indicating that they expect the ETH dollar to increase.”

The fact that the whale purchase rate has reached an all-time high “means that the upcoming rally could reach an all-time high,” CW added.

According to Glassnode data, this coincides with a piercing decline in ETH supply on centralized exchanges over the last six days.

ETH supply on exchanges fell 45% to a nine-year low of 10.2 million ETH on Sunday from 18.5 million ETH on July 1.

Decreasing balances on exchanges suggest less supply that can be sold immediately as more ETH is locked in shrewd contracts or placed in frosty storage.

“The supply of $ETH on exchanges is falling rapidly” he said DustyBC Crypto analyst in a recent post on X, adding:

“A supply shock is coming.”

Ethereum network activity returns to normal

According to Nansen, Ethereum network activity continues to show strength, with lively addresses increasing by 22% in the last seven days data.

The average monthly number of transactions increased by 16% to 11.3 million over the same period.

Additional data from Santiment discovers a piercing escalate in the number of recent wallets created on the Ethereum network, with an average of 163,000 recent addresses per day in December, up from 124,000 in July.

This means “a marked increase in network activity of the world’s second largest cryptocurrency” he said Rananjay Singh, in response to the development of the Ethereum network, added:

“Adoption is quietly gaining momentum.”

The number of transactions remains at a record high, which signals an overall upward trend in demand for networks.

As Cointelegraph reported, the transaction throughput on the Ethereum network is expected to escalate from 60 million to 80 million in January, which the market may not yet have priced in.

Analysts expect an “upside breakthrough” for Ether

Data from Cointelegraph Markets i TradingView shows ETH trading at $3,061, up 2.5% in the last 24 hours.

As Cointelegraph reports, a break through $3,200 is key to ETH’s upside potential and sets the stage for a possible rise to $4,000.

“Ethereum is building for a breakout higher” he said MN Capital founder Michael van de Poppe in his analysis of Ether on X.

“Another test of key resistance, which would mean that after this many tests, a breakout is likely,” the analyst said, referring to the $3,100-3,200 resistance that rejected recovery attempts earlier this month.

Van de Poppe said the altcoin is showing a “clear uptrend,” meaning buyers are willing to move to higher and higher levels.

“I assume there will be a rebound to the upside and the next target zone will be $3,650-$3,700.”

According to Bitcoinsensus, Ether remains bullish within a “widening channel structure,” which could cause the ETH/USD pair to begin to decline towards the upper band of the pattern.

“The potential upside target is around $7,000.”

As Cointelegraph reports, the 50-day exponential moving average (EMA) at $3,150 is a critical level for bulls to break as a break above it could push the ETH price towards $3,450 and later to $4,000.

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