Ethereum’s breakout and whale activity point to a possible rally amid deep undervaluation.
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Exchange Reserves declined as whales accumulated Ethereum.
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Drop in short-term holder activity and deeply negative MVRV mark a phase of long-term accumulation.
Ethereum [ETH] is staging a powerful comeback as its total value locked (TVL) dominance surged past 53%, its highest since March.
This renewed dominance aligns with significant whale movements, including 23,844 ETH transferred to Coinbase Institutional and 58,430 ETH moved between unknown wallets.
These large transactions suggest rising institutional interest and accumulation. At press time, ETH traded at $2,362.31, up 2.62% in 24 hours.
Is supply pressure finally easing?
Ethereum’s Exchange Reserves dropped by 1.1% in the past 24 hours to 19.25 million ETH, while Netflows plunged by 8.26%, showing a negative flow of 213,232 ETH.
These outflows indicate that more coins are being moved into self-custody, reducing the immediate sell pressure on centralized exchanges.
In fact, this implies investors are moving ETH into self-custody. When coins exit exchanges, sell pressure often eases, creating room for price stability—or even upward movement.
Source: CryptoQuant
MVRV long/short difference
Ethereum’s MVRV Long/Short Difference dropped to -40.91%, one of its lowest levels in recent months. Historically, such deep negative readings appear during accumulation phases or early recovery cycles.
Consequently, this may signal a strategic opportunity for fresh capital to enter the market. However, sustained recovery will likely depend on whether investor conviction holds at higher price levels.
Source: Santiment
Sharp decline in new holder activity
The 0d–1d HODL Wave declined to 0.114, suggesting a fall in short-term speculative activity. Fewer newly moved coins hint that current participants are conviction-driven rather than swing traders.
Although this reduces short-term volatility, it may also limit immediate buying momentum unless broader interest reignites.
Source: Santiment
Only 42.75% of total ETH fees were burned over the past seven days, down from the previous 90-day average of 35.03%.
This softening burn rate points to weaker on-chain transactional demand, which tempers Ethereum’s deflationary narrative for now.
Although lower burn rates reduce the scarcity effect, the sustained network usage still supports Ethereum’s broader utility case.
It remains to be seen whether upcoming DeFi activity reignites the burn rate in the coming weeks.
Has ETH flipped its bearish structure?
Ethereum recently broke out of a descending trendline that had persisted for several months, confirming a strong trend reversal.
The breakout was followed by a sharp rally toward the $2,365 level. The RSI read 81.90, showing that the asset is overbought in the short term.
However, momentum remains strong. If price holds above $1,761.30, the path toward $2,526.54 remains open.
Source: TradingView
Conclusion
Ethereum’s rising TVL dominance, declining Exchange Reserves, and confirmed breakout structure all point to a shift in market momentum.
Despite softening fee burns and reduced short-term activity, other on-chain indicators suggest growing institutional interest and strong-handed accumulation.
Based on these factors, Ethereum appears to be entering the early stages of a major rally, one potentially fueled by strategic repositioning and renewed capital inflows.
