Amid an overall crypto market price decline over the past week, ethereum (eth) recorded a price correction of over 19.5% and found support at a local low of $3,100. Since then, the prominent altcoin has only shown slight resistance, rising more than 5% in the past two days. However, recent data on wallet activity provides plenty of reasons to be optimistic about ethereum's long-term future.
ethereum HODL Addresses Increase Supply Dominance to 16%
In a recent <a target="_blank" href="https://cryptoquant.com/insights/quicktake/6765f736057c962db2c442aa-eth-Accumulation-Address-Holdings-Surge” target=”_blank”>Quick postCryptoQuant analyst MAC_D shared some positive thoughts on the ethereum market.
The cryptocurrency market expert reports that ethereum accumulation address balance increased by a remarkable 60% from August to December. During this time, these HODL wallets have increased their share of the eth supply from 10% to 16%, i.e. 19.4 million eth out of 120 million eth.
To explain, accumulation addresses are wallets that hold ethereum but rarely move or sell their holdings. They are considered a measure of long-term investment and confidence.
According to MAC_D, the rapid increase in holdings of these ethereum HODL wallets is a new development absent in previous bull cycles. The analyst attributed this huge accumulation rate to investors' bullish expectations about the incoming Donald Trump administration in the United States.
These expectations include more favorable regulations for the DeFi industry, which represents an important sector of the ethereum ecosystem. Therefore, regardless of ethereum's current price movement, these long-duration wallets are likely to continue increasing their holdings in anticipation of future price growth.
Furthermore, MAC_D emphasizes the importance of these accumulation directions in that the price of ethereum has never fallen below its realized price. Therefore, a continued purchase by these wallets provides a high potential for a long-term price gain.
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What's next for eth?
Regarding ethereum's immediate move, MAC_D warns that macroeconomic factors are likely to exert a greater influence on the price of eth in the near term, as illustrated by the recent price drop induced by possible small interest rate cuts in 2025.
At the time of writing, the altcoin is trading at $3,352 after a 3.07% drop in the last 24 hours. At the same time, eth's daily trading volume dropped by 53.25% and is valued at $31.15 billion.
Following the recent price drops, ethereum is also performing negatively on the larger charts with losses of 14.74% and 1.05% over the last seven and thirty days, respectively. On a positive note, the asset's price remains well above its initial price ($2,397) at the start of the post-US election price rally, indicating that long-term sentiment remains positive.
With a market capitalization of $401 billion, ethereum continues to rank as the second-largest cryptocurrency and the largest altcoin in the digital asset market.
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