Ethereum TVL Spikes: Rally Incoming?

Ethereum (ETH) is experiencing a significant resurgence, with its total value locked (TVL) dominance climbing above 53%—its highest point since March. This surge coincides with notable whale activity and suggests a potential shift in market sentiment. Could this be a precursor to a major ETH price rally?

Whale Activity and Institutional Interest

Recent large transactions, including 23,844 ETH transferred to Coinbase Institutional and 58,430 ETH moved between unknown wallets, point to increased institutional interest and accumulation. This activity suggests strong hands are accumulating ETH, potentially reducing future sell pressure.

Easing Supply Pressure?

• Exchange reserves decreased: A 1.1% drop in the last 24 hours to 19.25 million ETH, coupled with an 8.26% plunge in netflows (-213,232 ETH), indicates ETH is moving off exchanges into self-custody.
• Reduced sell pressure: This outflow lessens the immediate sell pressure on centralized exchanges, potentially paving the way for price stability or even growth.

Source: CryptoQuant

Market Sentiment Indicators

• MVRV Long/Short Difference: At -40.91%, this metric is at one of its lowest points recently, historically signifying accumulation phases or early recovery cycles. This could be a buying opportunity.
• Reduced Short-Term Holder Activity: The 0d-1d HODL Wave dropped to 0.114, showing a decrease in short-term speculation. This suggests long-term conviction among current holders. However, it might also limit near-term buying momentum.

Sources: Santiment

Burning Rate

The ETH burn rate decreased to 42.75% over the past seven days, compared to the 90-day average of 35.03%. While this reduces the deflationary pressure, sustained network usage still supports Ethereum's overall utility.

Trend Reversal?

Ethereum recently broke through a long-term descending trendline, suggesting a potential trend reversal. While the RSI is currently high (81.90), indicating short-term overbought conditions, the price holding above $1,761.30 could open a path to $2,526.54.

Source: TradingView

Conclusion

The combination of rising TVL dominance, decreasing exchange reserves, and a confirmed price breakout suggests a positive shift in the Ethereum market. Despite a reduced burn rate and less short-term activity, other indicators highlight growing institutional confidence and accumulation. This suggests Ethereum could be in the early stages of a significant rally.

Codeum: Your Partner in Blockchain Security
At Codeum, we provide comprehensive blockchain security services, including smart contract audits, KYC verification, custom smart contract and DApp development, tokenomics and security consultations, and partnerships with launchpads and crypto agencies. Let us help you navigate the complexities of the crypto market securely.