Ethereum eyes $2,600 as whales buy and supply drops

Whales are stacking Ethereum as supply tightens, setting the stage for a potential breakout above $2,600 amid growing bullish momentum.

Zagham Abbas
May 20, 2025
2:00 am

Zagham Abbas

Zagham is a renowned crypto journalist known for his insightful analysis and in-depth reporting on the cryptocurrency industry.

Whales accumulate ETH amid a 5.5% drop in exchange supply, signaling confidence in a long-term uptrend.
Technical indicators show that the price consolidates above the key support at $2,400 and could potentially break out toward $2,738–$3,104 if it reclaims $2,500.
Derivatives data remains bullish despite a volume dip, with top Binance traders heavily long and open interest holding strong.

Ethereum (ETH) is hovering near the $2,397 mark after shedding 6% over the past three days, leaving traders speculating about its next move. Despite a shaky start to the weekend with prices dropping 4%, on-chain data and derivatives metrics hint that ETH may be poised for a recovery.

Large holders, often referred to as “whales,” continue to accumulate ETH, a sign of confidence in a longer-term uptrend. Meanwhile, technical indicators are showing consolidation, with Ethereum trying to reclaim key resistance around $2,500–$2,600.

Over the past month, more than 1 million ETH has been withdrawn from exchanges, reflecting a 5.5% drop in available supply. According to data from CryptoBusy, exchange balances are now at their lowest since 2021; just 17 million ETH remain on trading platforms. Historically, such sharp reductions in exchange supply are bullish, as they typically coincide with rising prices due to diminished selling pressure.

🚨 BREAKING: MASSIVE ETH SUPPLY SHOCK DETECTED!

Exchange supply has plummeted to 17M as over 1 MILLION ETH (5.5% of total exchange supply) was withdrawn in just 30 days!

This is the sharpest exchange outflow since the 2021 bull run, happening while price SIMULTANEOUSLY climbs… pic.twitter.com/3Degzf4cy2
— CryptoBusy (@CryptoBusy) May 18, 2025

The broader trend supports this narrative. From a recent low of $1,800, ETH climbed more than 44% to surpass $2,600, mirroring past rallies that followed similar supply contractions. As whales move assets into cold storage, confidence in ETH’s long-term value appears to be growing.

Ethereum Holds Above 2400 with Target Near 3104

On the 3-day chart, ETH has been making both higher highs and higher lows, a bullish signal. After briefly surpassing the key Fibonacci retracement levels of 0.618 and 0.786, Ethereum hit resistance just under $2,500 before pulling back to $2,457. Still, it remains comfortably above the 0.786 support at $2,403.

One concern for short-term traders is the appearance of a TD Sequential “9” sell signal, which often points to a potential cooldown or profit-taking phase. If ETH holds above $2,400 and breaks through $2,500 again, analysts anticipate a rally toward $2,738, with a longer-term target near $3,104.

Momentum indicators are showing mixed signals. The Relative Strength Index (RSI) has cooled from an overheated 70.85 to 66.78, while the MACD continues to flash bullish signs, though its histogram is narrowing, suggesting slowing momentum.

Despite a 12.78% decline in ETH derivatives trading volume, open interest has held steady at $30.84 billion, indicating that traders are not exiting positions but rather preparing for the next move. Options activity also supports a longer-term bullish stance, with open interest ticking up to $7.25 billion, even as overall volume declined.

Ethereum Gears Up for Breakout as Top Traders Stay Long

CoinGlass data reveals that Binance’s top traders remain heavily long on ETH, with a long/short ratio of 3.04 by account and 2.66 by position, implying that over 75% of high-volume traders are betting on further gains.

Liquidation data reinforces this outlook. In the past 24 hours, $93.14 million in ETH positions were liquidated, but the vast majority, $81 million, came from longs, signaling a correction rather than a full reversal. Despite recent volatility, ETH has gained roughly 35% over the past two weeks.

The $2,450–$2,500 zone is now seen as a key battleground. Price action above VWAP ($2,485) and tightening Donchian Channels suggest that Ethereum is gearing up for a decisive move. Should ETH rise above $2,500 with high volume, a breakout toward $2,738 could follow. Conversely, if prices dip below $2,450, traders may eye supports at $2,235–$2,200.

Ethereum remains technically strong, with support zones between $1,986 and $2,196, key Fibonacci retracement levels from prior rallies holding firm. Following a nearly 40% surge in recent weeks, the asset is on track for one of its strongest monthly performances in recent history.

With momentum building, whale accumulation, tightening supply, and bullish derivatives positioning could propel another leg higher, as markets watch closely for a retest of the psychologically significant $2,600 level.