Ethereum Hits $4K as Retail Demand Grows

Ethereum Breaks $4,000 Barrier as Retail Investor Demand Surges

After months of struggling, Ethereum (ETH) has finally broken the $4,000 mark on December 7, driven by strong accumulation from retail investors. The leading altcoin reached a local high of $4,100 over the weekend and has since been consolidating near that level.

Ethereum Price and Market Performance

As of the latest data, Ethereum is trading at $3,950, following a mild 0.8% correction over the past 24 hours. The asset’s market capitalization is currently at $475 billion, with a 21% increase in daily trading volume, reaching $24.5 billion.

Key Data Behind Ethereum’s Surge

• Retail Accumulation: Investors accumulated over $1 billion worth of ETH in the past week, according to analytics platform IntoTheBlock (ITB).
• Exchange Net Outflow: On December 4, the largest exchange net outflow saw almost 104,000 ETH leave exchanges.
• Retail Activity vs. Whales: The large holder-to-exchange net flow ratio is currently at -0.65%, indicating that retail investors are more active than whales.
• Whale Movements: Large holder inflows fell to a one-month low of 197,160 ETH on Sunday, signaling a net outflow of 4,550 ETH from whale addresses.
• Decline in Whale Transactions: Whale transaction volumes (ETH transactions worth $100,000 or more) dropped from $17 billion to $4.8 billion between December 6 and 8.

Ethereum ETFs and DeFi Growth Drive Price Surge

The recent rally to the $4,000 level was also supported by strong growth in Ethereum’s spot exchange-traded funds (ETFs) in the U.S. These products saw a net inflow of $836.8 million last week, contributing to Ethereum’s bullish momentum.

Additionally, Ethereum’s decentralized finance (DeFi) sector is experiencing significant growth. The total value locked (TVL) in Ethereum’s DeFi ecosystem hit $77 billion on Monday, the highest level since April 2022, according to data from DeFi Llama.

What’s Next for Ethereum?

Looking ahead, Ethereum’s future price action will depend on various factors, including retail sentiment and whale activity. The recent decline in whale activity could potentially trigger fear, uncertainty, and doubt (FUD) among retail investors, which may lead to a short-term correction before another major rally.

Crypto analyst and influencer Crypto Rover has pointed out the similarity between Ethereum’s current price action and Bitcoin’s (BTC) breakout to the $100,000 mark. While the price movements of ETH and BTC over the last four years show similarities, changes in investor sentiment and macroeconomic factors could cause the volatile crypto market to move in unexpected directions.