Since December, Ethereum (ETH) has been facing challenges in reviving its bullish momentum, evident in its struggle to achieve higher price highs and limited upward movement.
However, could ETH be on the brink of a significant bullish breakthrough?
The price action of the leading altcoin has been following a wedge pattern, characterized by descending resistance and ascending support levels since December.
With the convergence of these trends, a breakout or breakdown from this pattern appears imminent as ETH approaches a critical phase.
Investors are now pondering the potential trajectory of ETH amid rising uncertainty, especially with its underperformance relative to competitors that are experiencing strong demand.
Furthermore, Ethereum faces increasing competition from networks like Sui (SUI) and Solana (SOL), which have been thriving in terms of network activity.
Positive Signals from Network Activity
Despite the perceived lag in Ethereum’s performance, a closer look at network activity presents a more positive outlook that could bolster long-term investor faith.
Recent data from IntoTheBlock indicates a growing number of depositors engaging with Ethereum staking contracts.
On January 25th, the number of addresses depositing into staking contracts peaked at 211,720, a significant increase from about 152,230 addresses a year prior.
Moreover, the total amount of ETH staked reached a new all-time high of 56.38 million ETH, underscoring growing interest in staking activities.
These trends suggest a continued investor confidence in ETH’s long-term potential, contrasting with short-term fluctuations in performance.
Insights from Ethereum Address Activities
An examination of ETH addresses based on the duration of holdings reveals intriguing trends. Over the past few months, the number of long-term HODLers has steadily increased.
From October 1st to December 25th, the number of HODLer addresses rose from 91.18 million to 96.98 million.
During the same period, Cruiser addresses expanded by approximately 5 million, while the population of traders nearly doubled. This rise in address numbers aligns with the surge in ETH allocated to staking contracts.
While holders remain optimistic about ETH’s long-term outlook, the increase in trader addresses corresponds to short-term market volatility.
As a result, Ethereum may be on the cusp of regaining its bullish momentum, potentially propelling the altcoin to reach $5000 in the near future.