Ethereum (ETH) staged an impressive recovery during May, up more than 50%, and on-chain indicators now show a clear sign of change in investor sentiment, driven by expectations for the upcoming Pectra update.
This optimism has led many analysts to predict potential price increases for the main altcoin.
All key on-chain indicators relating to ETH withdrawals from exchanges, reserves held on exchanges and accumulation by large holders (whale) have reached significant thresholds over the past month. According to CryptoRank's data, ETH held on exchanges dropped significantly from over 18 million to nearly 17 million within a month.
"Over the past month, more than $1 million ETH was taken from centralised exchanges, accounting for about 5.5% of the total #ETH on these platforms. This trend suggests that users increasingly prefer to accumulate #Ethereum rather than exchange it. The recent Pectra update, activated on 7 May, could further reinforce this behaviour and, as a result, exert bullish pressure on Ethereum's price," CryptoRank said in a post on X (formerly Twitter).
Ethereum Supply on Exchanges Drops as Price Climbs
- CryptoRank.io (@CryptoRank_io) May 17, 2025
Over the past month, more than 1 million $ETH have been withdrawn from centralised exchanges, which accounts for approximately 5.5% of the total #ETH held on these platforms. This trend suggests that users are increasingly... pic.twitter.com/lnqW7xOCGR
Curiously, CryptoQuant's statistics show that Binance alone recorded over 300,000 ETH withdrawn in the same time frame, while over 800.000 ETH have been withdrawn since the beginning of the year.
The withdrawal trend did not stop at the lows below $1,400 at the beginning of April, but intensified with ETH exceeding $2,400 in May. The relationship between the drop in reserves and the rise in ETH's price, highlighted by CryptoRank, further strengthens the bullish thesis.
whale activity and analyst forecasts fuel optimism
In support of the positive signals, accumulation addresses recorded their highest ever inflows. CryptoQuant reported a record single-day accumulation of more than 325,000 ETH from whale portfolios on May 12. This type of accumulation is often an anticipatory indicator of price rises, as it reduces the circulating supply available in the market.
Technically speaking, analyst TedPillows identified a unique bullish pattern that formed in May, suggesting a possible return to the psychological threshold of $3,000 per ETH.
"Golden Cross of $ETH confirmed. Ethereum at $3,000 is the next milestone," he stated.
$ETH Golden Cross confirmed.
- Ted (@TedPillows) May 18, 2025
$3,000 Ethereum is coming next. 🚀 pic.twitter.com/zdC1AcCfcn
Despite the recent recovery, ETH is still well below its peak and requires a 70% increase to surpass the 2024 high, and would need to more than double to reach a new all-time high.
While some analysts, such as Bitcoin's PlanB, express concerns about Ethereum's centralisation and economic narrative, a different view was recently expressed in an interview by Arthur Hayes.
"I think Ethereum has better performance prospects mainly because it's very undervalued. Everyone thinks Ethereum does nothing, has done nothing right, yet it still has the highest TVL, the most developers, and is still the most secure proof-of-stake blockchain. Yes, the price has not been great since 2020. Solana, of course, has done very well, from $7 to $172. But if I were to invest new fiat capital in the system, I think Ethereum could outperform Solana in the next 18-24 month bullish cycle," Hayes said.
Hayes admitted that despite the criticism, Ethereum remains the most secure blockchain with the highest TVL, and suggested that it could soon surpass Solana. Moreover, many industry observers believe that ETH has the potential to overtake even Bitcoin, especially due to its growing dominance in Real World Assets (RWA) and decentralised finance (DeFi).
