Key Moments:

• ETH reached a high of around $2,650 on Tuesday before consolidating around $2,615.
• Spot Ethereum ETFs recorded $321 million in inflows during the week that ended on May 30th.
• Exchange balances fell to their lowest level in seven years, suggesting long-term holding behavior.

ETF Interest Sparks Rally

Ethereum advanced on Monday as rising demand from institutional investors and reduced exchange supply triggered a strong upward move. Earlier movements saw ETH climb around the $2,650 mark, and although the token would later ease, it continues trading above the $2,600 threshold.

The recent rally has been attributed to heightened investor appetite for ether-related instruments, particularly spot ETFs. The week saw $321 million flow into ether ETFs, marking the highest weekly inflow of the year. This significant capital movement has been interpreted as a signal of growing market confidence in ETH’s long-term valuation.

Supply Tightens Across Exchanges, Institutional Activity and Whales Drive Momentum

Ethereum’s bullish tone has been reinforced by a continued decline in the amount of ETH available on centralized exchanges, a move interpreted as investors opting for long-term holding and self-custody. Recent data from IntoTheBlock shows that $1.12 billion worth of ETH exited exchanges, and large transactions, classified as $100,000 or more, reached $45.56 billion. Investor sentiment may also be buoyed by an increase in network engagement. 

These trends coincide with ETH becoming one of the top-performing major tokens for the week. Moreover, increased on-chain activity and address participation, combined with 56% of holders being whales (60% of whom are in profit), bolsters the argument for an ongoing trend reversal.