4 signs that indicate the price of Ethereum is heading towards $5,000

After a price rise of over 100% to $2,800 from a low of under $1,400 in April, Ethereum (ETH) has traded within a narrow range of $400 for nearly 8 weeks. Despite the summer lull, many data points suggest that ETH could still rise to $5,000 by 2025.

Daily chart ETH/USD | Source: TradingView## Strong inflow of Ethereum spot ETF

The ability of ETH to break through to a new peak is also driven by the influx of capital into Ethereum-based investment products, indicating that institutional demand continues.

According to CoinShares, investment products based on Ethereum globally continue to record positive signals last week, with a net inflow of 226.4 million USD. These products now account for an average of 1.6% of weekly managed capital over 11 weeks, compared to 0.8% for Bitcoin.

The head of research at CoinShares, James Butterfill, said:

"This highlights a significant shift in investor sentiment towards supporting Ethereum."

Money flow by asset | Source: CoinSharesThe Ethereum spot ETF funds in the United States, led by BlackRock's iShares Ethereum Trust (ETHA), recorded inflows totaling 148.5 million USD on Thursday and approximately 510 million USD in net inflows over the past two weeks.

Last week marked the eighth consecutive week these products recorded net inflows, with 61,000 ETH.

If this trend continues, ETH could recover above $2,800 and then aim for a new ATH in the second half of 2025.

Source: Glassnode## The supply of ETH on exchanges is at its lowest in 8 years

A key factor supporting the bullish scenario is the decline in supply on exchanges.

Data from Glassnode shows that the ETH balance on exchanges has reached a record low of 13.5% in 8 years, the closest level recorded in July 2016.

ETH supply on exchanges | Source: GlassnodeThis could be a signal for an upcoming bullish trend due to a "supply shock," which occurs when there is a sudden increase in demand but the supply decreases.

Whales often withdraw Bitcoin (BTC) after purchasing, signaling that accumulation is taking place. With fewer coins available for sale, short-term selling pressure will ease.

This is evidenced by the accumulation rise of large holders over the past few weeks. More data from Glassnode shows that the supply in wallets holding 100,000 ETH or more has increased since the end of May.

The supply in wallets holding more than 100,000 ETH | Source: GlassnodeThe number of wallets holding 100,000 ETH or more has risen to 18.8 million ETH on Monday from 18.1 million ETH on May 21, indicating that whales are not selling during the latest bullish trend.

SOPR indicates ETH will continue to rise

The SOPR index shows that profit-taking is not occurring even though most ETH holders are in profit.

SOPR is an index that indicates whether short-term holders are making a profit or loss compared to the time they bought in. A value above 1 indicates that they have made a profit from short-term investments, while a value below 1 indicates that part of this group of investors is incurring losses.

The SOPR of Ethereum is currently at 1.01, reflecting confidence in the market and holders not wanting to sell at a loss. In the past, a SOPR value above 1 during a bullish trend indicated the potential for price rise.

SOPR of short-term ETH holders | Source: CryptoQuant## MVRV bands suggest a price of $5,000

Since May, the price of ETH has typically traded in the range of $2,400 to $2,800.

This is the clearly defined range according to the MVRV ratio, assessing whether an asset is overvalued or not.

The indicator shows that the price of ETH still has a lot of room to expand further before the unrealized profits of holders reach their peak level, represented by the two upper MVRV bands in the range of $4,000 to $5,000 as shown in the chart below.

Maximum deviation pricing range MVRV of ETH | Source: GlassnodeThe price volatility of Ether has formed a V-shaped recovery pattern on the weekly chart since December 2024.

ETH is currently trading below the main supply-demand zone in the range of $2,600 to $2,800, where the 100-day and 50-day simple moving averages (SMA) are located. The bulls need to push the price above this zone to increase the chances of heading towards the neckline at $4,100 to complete the V-shaped pattern.

The next logical move will push ETH towards the 2021 ATH at $4,800, rising 92% from the current price.

Weekly chart ETH/USD | Source: TradingViewSome analysts have also stated that ETH has the potential to surpass $5,000 this year, citing upgrades to the Ethereum network, the Power of 3 price model forecast, and increasing demand from institutional investors.

Vincent