Who Triggered ETH’s Biggest Daily Surge in Four Years?

Ethereum Price Today: $2,330

Ethereum (ETH) is making headlines with a current price of $2,330, but what’s even more captivating is its stunning 21% surge on Thursday—the highest single-day gain since May 2021. Such impressive performance raises questions about what’s driving this rapid increase and what it means for investors.

The Cause Behind the Surge

The recent rally in Ethereum’s price can be largely attributed to increased activity among crypto native investors in the spot market. A significant net withdrawal of 180,000 ETH from exchanges signals a growing confidence in the asset and a shift toward holding rather than trading. This strategy typically indicates that investors anticipate upward price movements, as they’re moving their tokens into private wallets for long-term holding.

Unpacking the 21% Gain

This notable 21.8% gain reported on Thursday was not only remarkable in its scale but also significant in the context of market behavior. Despite the price climb, data indicated a continuing trend of negative flows for U.S. spot Ether ETFs, which saw net outflows for three consecutive days totaling $16.11 million on Thursday. This suggests that the rally was not influenced by ETF flows or speculative leverage trading, as Ethereum’s funding rates remained stable at around 0.01.

The decline in ETH exchange reserves—plummeting nearly 180,000 ETH within 24 hours—also reflects the increased demand from spot investors. In the last two weeks, over 450,000 ETH have been withdrawn from exchanges, further underscoring growing investor confidence.

Institutional Influence

Institutional players have also contributed to the recent gains. For example, Abraxas Capital withdrew 138,511 ETH from exchanges such as Binance and Kraken within just two days, according to wallet tracker Lookonchain. This institutional involvement adds another layer of legitimacy and support for Ethereum’s price growth.

Rising Engagement Signals

A surge in active addresses from 458,000 to 563,000 in just one day indicates a heightened interest from the crypto community. Data from Santiment shows that this increasing engagement is not merely anecdotal; it correlates with a substantial rise in ETH’s Weighted Sentiment, now at 5.2—its highest since May 2024. This metric reflects a positive shift in market sentiment towards Ethereum.

The Role of the Pectra Upgrade

A pivotal development was the activation of the Pectra upgrade on the Ethereum mainnet. This upgrade introduced features aimed at improving user experience, staking efficiency, and scalability. Alongside this upgrade, a leadership restructuring at the Ethereum Foundation (EF) has sparked optimism among investors and may have contributed to the bullish sentiment.

Price Forecast: Key Resistance Levels

As ETH continues to gain momentum, it is now eyeing significant resistance levels at $2,500 and $2,850, which are crucial for a solid recovery. Following the rally, Ethereum saw approximately $364 million in futures liquidations, comprised of $158.74 million in long positions and $205.61 million in shorts.

Currently, ETH is testing the $2,500 resistance level, supported by the 100-week Simple Moving Average (SMA). The coin could face a correction at these levels, particularly if it cannot breach the resistance points. Technical indicators such as the Relative Strength Index (RSI) are crucial in this phase; it has crossed above its moving average and is testing neutral levels, which if confirmed could strengthen bullish momentum.

Risk of Reversal

However, it’s essential to remain cautious. Should the price close below $1,680 on a weekly candlestick, it would invalidate the current bullish thesis, potentially pushing ETH towards critical support near $1,400—an essential level for any recovery narrative.

Disclaimer: For information purposes only. Past performance is not indicative of future results.