Ethereum Pullbacks Spark Accumulation Activity – Here’s Why

Over the past two weeks, the Ethereum price has trended downward, sparking fears of another prolonged correction. However, data from a recent on-chain analysis indicate that the long-term bullish case for Ethereum remains quite strong.

At the same time, the MVRV metric signals that the Ethereum market remains healthy, despite recent corrections. PelinayPA explains that while many ETH holders are in profit, the MVRV metric has yet to enter the overheated zones historically reached at cycle tops.

Interestingly, Binance depositor activity has not been rising the same way as the amount of staked ETH. For context, when depositor activity climbs, it is often interpreted as a sign of imminent short-term sell pressure. This is because investors mostly send ETH to Binance in preparation for selling or taking profits. So, while depositor activity has been on the rise, PelinayPA notes that this is inconsequential in the long-term, as staked ETH is climbing steadily and even more aggressively, compared to the amounts recorded in Binance deposits. 

Simply put, this means that while short-term players are planning to sell Ethereum, long-term holders are simply taking Ethereum out of circulation and staking it. PelinayPA explains that this kind of divergence often sets the tone for a supply squeeze to play out in the medium to long term. Finally, the crypto analyst reveals that Ethereum’s Realized Cap has also continued to climb. According to the analyst, this reflects that capital is still entering the Ethereum market. Interestingly, PelinayPA points out that this kind of structure is typical of late bull cycles rather than bearish markets. 

Hence, the Ethereum market is currently in a strong bullish trend and may see occasional corrections. According to PelinayPA, when these pullbacks show up, they would likely be buying opportunities, but only if the Binance depositor activity metric has not seen any sudden spikes. As of press time, Ethereum trades for $2,113, reflecting a 2.26% growth over the past day, according to CoinMarketCap data.