Ethereum Rally Stalls Near $2.58K as Holders Take Profits

An analysis by Glassnode on May 13 highlights that Ethereum’s rapid rise was fueled by minimal resistance between the $1,800 and $2,500 range. However, the rally began to lose momentum near the $2,580 mark, a crucial level where around 1.3 million ETH had been accumulated. As the price approached this resistance zone, the held supply dropped to 1 million ETH, suggesting that many holders decided to sell near their break-even point, contributing to the recent pullback.

Interestingly, Ethereum’s recent rally seems driven by spot demand rather than leveraged positions. A separate analysis from CryptoQuant on May 12 by contributor ShayanMarkets notes that Ethereum’s funding rates, which measure sentiment in the futures market, have remained flat. This suggests that the primary source of buying pressure came from the spot market rather than traders using borrowed funds. This is generally seen as a positive development, reducing the risk of sudden price crashes due to mass liquidations. Nevertheless, funding rates may need to rise slightly for the uptrend to continue, signalling that futures traders are also regaining confidence in the market.

Notably, Ethereum recently posted a remarkable 20% gain, reaching its most undervalued level relative to Bitcoin since 2019. This surge was driven by a significant increase in trading activity, especially in the derivatives market, where volume soared by 184%, according to Coinglass. At the same time, open interest in Ethereum futures climbed by 20% within 24 hours, highlighting a fresh influx of capital and growing investor confidence in the asset.

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