Here’s how Ethereum is getting ready for the $4k mark

Leading altcoin Ethereum has been showing 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 king altcoin hit a six-month high of $3,900 after Bitcoin (BTC) surged above the $100,000 threshold early Thursday.

Source: crypto.news

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

The second-largest cryptocurrency reached a market capitalization of $463 billion as daily trading volume rose 46% to $63 billion.

What’s driving the ETH rally?

There are many factors pushing Ethereum upwards and creating strong buying pressure.

Most importantly, US-based spot ETH exchange-traded funds recorded consistent inflows for eight days. According to data provided by Farside Investors, spot Ethereum ETFs have seen net inflows of $882.3 million since November 22, mostly from BlackRock’s ETHA fund.

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

Moreover, according to data from analysis platform IntoTheBlock, Ethereum recorded a net outflow of $820 million in the last seven days; It recorded its highest single-month debut of $385 million on December 4 alone.

ETH exchange net flow | Source: IntoTheBlock

On-chain movement indicates investors are accumulating the asset. Considering that 74% of Ethereum holders have held their holdings for more than a year, according to ITB data, the leading altcoin could potentially see a decline in selling pressure.

Data from ITB shows that whale transactions consisting of at least $100,000 worth of ETH reached $73 billion last week.

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

Additionally, Ethereum’s decentralized finance sector is also 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 reached $134.7 billion, a 31-month high.

Despite the price increase towards June highs, Ethereum’s Relative Strength Index is still hovering in neutral territory and currently stands at 63. This signals a maturing accumulation phase for the leading altcoin, following the path of digital gold.

Disclosure: This article does not constitute investment advice. The content and materials on this page are for educational purposes only.