• Ethereum surged 5%, breaking key resistance as on-chain activity and whale accumulation intensified.
• Exchange inflows rose, but price strength suggests underlying demand may be absorbing profit-taking pressure.

Ethereum [ETH] has taken center stage once again, surging 5% in a decisive breakout that has outpaced Bitcoin!

As we look for clues to gauge whether this momentum is sustainable, the data offers valuable insights into what’s driving the rally and where ETH could be headed next.

Ethereum’s momentum builds

Ethereum’s price action is commanding attention once again. After briefly dipping, ETH staged a strong recovery, climbing nearly 5% in a single day and closing decisively above its recent resistance near $2,730.

Source: TradingView

On the 27th of May, Ethereum’s daily chart displayed a bullish engulfing candle, followed by consistent green candles, signaling strong upward momentum.

Unlike Bitcoin, which recorded a 2.86% decline, Ethereum’s trend is gaining traction, supported by rising volatility, making it stand out in the market.

Whales stir as activity peaks

Source: Santiment

On-chain activity on the Ethereum network surged sharply in mid-May, as daily active addresses climbed to over 500K.

Source: Santiment

The surge in demand wasn’t limited to retail investors—wallets holding 10,000 to 100,000 ETH significantly increased their holdings during the rally, signaling renewed confidence from mid-sized whales.

Meanwhile, the largest wallets (1 million -10 million ETH) reduced their holdings by the 29th of May, suggesting redistribution or profit-taking.

The combination of rising address activity and selective whale accumulation indicates that the network is gaining momentum, with smart money positioning ahead of key catalysts.

Supply shifts and sentiment

In early May, Ethereum’s price broke above $2,200 and continued climbing toward $2,700, but exchange inflows also spiked — a notable shift in investor behavior.

Historically, rising inflows suggest growing sell pressure, especially when coupled with a price rally.

Source: CryptoQuant

The increase in deposits suggests profit-taking or hedging by short-term holders.

However, the continued price climb despite these inflows indicates strong underlying demand, likely absorbing sell pressure from institutions or long-term investors.

If inflows persist without disrupting the uptrend, it could signal a maturing rally, driven by deep liquidity rather than short-term speculation.