Ethereum has seen a notable price surge, reaching a 12-day high of $2,832 before stabilizing around $2,720. This 2% daily gain stands out against the broader crypto market’s 2.4% decline. Analysts suggest that Ethereum’s rally is fueled by a record-low exchange supply, indicating a strong accumulation trend among investors.

Ethereum’s Supply on Exchanges Hits Historic Low

Blockchain analytics firm Santiment reports that only 6.38% of Ethereum’s total supply is currently held on centralized exchanges—the lowest level since its inception. This decline suggests that investors are increasingly choosing to hold rather than sell, reducing the risk of a significant price drop.

Adding to the bullish sentiment, ETH withdrawals from derivatives exchanges have surged to their highest level since August 2023. This trend indicates growing investor confidence in Ethereum’s long-term potential, even though analysts caution that these metrics do not serve as immediate trading signals.

Ethereum Struggles Against Bitcoin

Despite Ethereum’s recent rally, its valuation against Bitcoin remains weak. The ETH/BTC ratio climbed 7% on February 17 to reach 0.029, but it remains near its lowest level since December 2020.

Ethereum has been underperforming Bitcoin since mid-2022, as investors continue favoring BTC. To reverse this trend, Ethereum needs stronger catalysts and must break key resistance levels to gain relative strength against Bitcoin.

Market Sentiment Remains Divided

Crypto analysts have mixed opinions on Ethereum’s latest move. While some see it as a sign of recovery, others remain skeptical.

• Lark Davis, a prominent crypto analyst, dismissed the rally, stating that ETH often rises slightly before dropping again.
• Time To Trade analysts argue that Ethereum has yet to break the critical $2,710 resistance level. If ETH fails to hold above this mark, it could signal weak buying pressure.
• If Ethereum falls below the $2,635 support level, a further decline toward $2,500 could follow.

Rising Short Positions Signal Caution

Short sellers have been increasing their bets against ETH in recent weeks. Futures contracts on the Chicago Mercantile Exchange (CME) hit a record high of 11,341 earlier this month. This marks a 40% rise in a week and a 500% surge since November, signaling ongoing skepticism about Ethereum’s short-term prospects.