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New Ethereum Setup: Why Investors are Flocking to ETH
While the market is still facing changes in sentiment, Ethereum [ETH] is transforming quietly but powerfully.
Although the headlines focus on price volatility and the slowdown of DeFi, on-chain data reveals a story of accumulation strategies and increasing confidence from experienced holders.
From the panic sell-off gradually decreasing to record inflows into long-term wallets, the supply behavior of Ethereum is in stark contrast to Bitcoin [BTC], reflecting a mature investor base that may be preparing for the next big leap.
Ethereum Supply Shift: Notable Accumulation Strategy
The move to provide ETH tells a contrasting story compared to BTC. As shown on the heatmap, there has been no notable growth from early buyers or momentum buyers – the RSI of these groups remains subdued.
However, confident buyers have continuously accumulated since the end of March, maintaining a strong RSI around 80, indicating stable confidence despite the overall market being hesitant.
Notably, the sellers at a loss peaked around April 16 but have since slowed down, as the RSI fell below 50, indicating a reduction in panic selling.
This change in group behavior indicates a more strategic accumulation phase rather than a breakout due to fear, showing increasing confidence from experienced Holders.
DeFi cools down, but the accumulators show confidence
Despite the recent increase in trading activity, the DEX ecosystem of Ethereum has not yet returned to its peak.
TVL in DEXs based on Ethereum has decreased by nearly 90% from its all-time high, while monthly trading volume has dropped by about 55%. Users may be shifting to other chains or opting for off-chain solutions amid the uncertain market conditions.
However, a deeper trend is emerging. Accumulation addresses – wallets that have never sold – are absorbing ETH at an unprecedented rate.
In just the past 48 hours, these addresses have attracted over 640K ETH, the largest inflow since 2018. This behavior, as shown in CryptoQuant's data, indicates increasing confidence from long-term Holders despite weak prices.
Ethereum Price Outlook
The recent price action of Ethereum shows signs of a short-term recovery, but the momentum remains fragile. After a sharp decline below 1,700 USD, ETH has recovered to test the resistance level near 1,800 USD at the time of writing.
The RSI index is around 52, indicating neutral momentum, while the MACD shows a slight crossover in the upward direction – which could be a sign of a continuing positive trend.
However, the volume remains modest, and the rejection near 1,800 USD suggests that sellers are still active. If ETH can hold above the 1,720-1,750 USD range, it is likely to retest the 1,850 USD level.
But if support cannot be maintained, it could open up the opportunity for the price to drop to the level of 1,650 USD.
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