This is how Ethereum is preparing for the $4k mark

ethereum, the leading altcoin, has shown positive signs over the past week after months of bearish consolidations.

ethereum (eth) is up 4% in the last 24 hours and is trading around $3,840 at the time of writing. The altcoin king hit a six-month high of $3,900 thanks to bitcoin's (btc) rally above the $100,000 threshold early Thursday.

At this point, ethereum is 21% away from its all-time high of $4,891 in November 2021.

The second-largest cryptocurrency reached a market capitalization of $463 billion, while its daily trading volume increased 46% to $63 billion.

What is driving the eth rally?

There are many factors driving ethereum up, creating strong buying pressure.

Notably, US-based spot eth exchange-traded funds recorded eight days of steady inflows. According <a target="_blank" href="https://farside.co.uk/eth/” target=”_blank” rel=”nofollow”>data Provided by Farside Investors, ethereum spot ETFs saw a net inflow of $882.3 million since Nov. 22, mostly from BlackRock's ETHA fund.

This brought total inflows into these investment products to $901.3 million despite a $3.4 billion outflow from Grayscale's ETHE fund.

Additionally, ethereum recorded a net currency outflow of $820 million in the last seven days (recording a one-month high of $385 million on December 4 alone), according to data from analytics platform IntoTheBlock.

The on-chain movement suggests that investors have been accumulating the asset. Considering that 74% of ethereum holders have held their assets for more than a year, according to ITB data, the leading altcoin could see decreasing selling pressure.

ITB data shows that whale transactions consisting of at least $100,000 worth of eth reached $73 billion over the past week.

Increasing whale activity often triggers signs of FOMO (fear of missing out) among retail investors, consequently increasing buying pressure due to greedy market conditions.

Additionally, the ethereum decentralized finance sector has also been growing at a strong pace. According to a crypto.news report on Wednesday, ethereum's total DeFi value locked reached $72.9 billion, while total TVL hit a 31-month high of $134.7 billion.

Despite the price surge to June highs, ethereum's Relative Strength Index still remains within the neutral zone, currently at 63. This suggests a maturing accumulation phase for the leading altcoin, following the path of gold digital.