Amid a general market correction in the cryptocurrency space over the past week, Ethereum (ETH) experienced a notable price drop of over 19.5%, finding a support level around $3,100. Despite this, Ethereum has shown some resilience in the last couple of days, with a modest increase of over 5%. However, recent data on wallet activity suggests that there are reasons to be optimistic about Ethereum’s long-term prospects.
One key indicator of positive sentiment towards Ethereum is the increase in the balance of Ethereum Accumulation Addresses. According to a recent post by CryptoQuant analyst MAC_D, these HODL wallets have seen a significant surge of 60% between August and December. As a result, these wallets now hold approximately 16% of the total ETH supply, which amounts to around 19.4 million ETH out of 120 million ETH.
Accumulation Addresses are wallets that hold Ethereum but rarely engage in transactions or selling activities. They are seen as a measure of long-term investment and confidence in the cryptocurrency. MAC_D attributes the rapid growth in these HODL wallets to investors’ optimism surrounding the incoming US administration under President Donald Trump. The expectation of more favorable regulations on the DeFi sector, a crucial part of the Ethereum ecosystem, is driving this accumulation trend.
Furthermore, MAC_D highlights the significance of these Accumulation Addresses, noting that the price of Ethereum has never dropped below their realized price. This suggests that continuous buying by these wallets could lead to significant price appreciation in the long run.
Looking ahead, MAC_D cautions that macroeconomic factors are likely to have a stronger influence on Ethereum’s price in the short term. The recent price decline, triggered by concerns about potential reduced interest rate cuts, serves as a reminder of this. As of the latest data, Ethereum is trading at $3,352 with a 3.07% decrease in the past 24 hours. The daily trading volume has also dropped by 53.25% to $31.15 billion.
Despite some negative performance in the past week and month, Ethereum’s price remains well above its starting point before the post-US elections rally, indicating overall positive sentiment. With a market cap of $401 billion, Ethereum retains its position as the second-largest cryptocurrency and the leading altcoin in the digital asset market.