- Ethereum user engagement and DeFi inflows suggested growing on-chain momentum.
- Exchange outflows and an ETH bullish chart pattern indicated a breakout potential near $2,824.
Since the start of June, Ethereum [ETH] has seen ecosystem usage surge. Weekly Active Addresses jumped to 17.4 million, marking a new all-time high.
This includes a sharp 18.43% rise in Layer 2 Interactions, further amplified by a 7.55x multiplier, indicating a massive adoption spike in scalability networks.
While cross-chain activity saw a slight decline, the sheer volume of core Ethereum usage reflects renewed interest from both retail and institutional participants.
Therefore, the sharp uptick in activity could set the stage for a potential momentum-driven breakout.
Can DeFi inflows sustain Ethereum’s bullish narrative?
Ethereum’s Total Value Locked (TVL) climbed to $86.63 billion — up 1.28% in 24 hours, per DeFiLlama. This reflects sustained capital inflow into Ethereum-based DeFi protocols despite recent market-wide volatility.
Investors are clearly regaining confidence in DeFi’s long-term viability, using Ethereum as the preferred settlement layer.
As more assets flow into lending, staking, and liquidity protocols, Ethereum’s on-chain demand strengthens.
Consequently, a growing TVL may offer vital support to Ethereum’s price action and ecosystem growth in the near term.
Source: DefiLlama
Will exchange outflows drive a supply squeeze for ETH?
At the time of writing, Ethereum recorded a negative Exchange Netflow of a 1.59% decline in balance across major exchanges. This suggests a trend of users withdrawing assets to self-custody or locking them into staking contracts.
Naturally, reduced exchange balances shrink immediate sell pressure and enhance bullish setups during momentum phases.
If the trend holds, ETH could enter a supply squeeze scenario where even moderate demand spikes trigger steep price moves.
Source: CryptoQuant
Are traders too confident as volatility dips and longs pile up?
Volatility has dropped from 80.25% to 47.3% in just two days.
At the same time, Binance’s ETH Long/Short Ratio stood at 1.84, at press time, with 64.82% of traders long.
This reflects a clear bullish bias, though it also raises concerns of overcrowded trades. Lower volatility and stacked long positions can precede sharp moves, particularly if sentiment abruptly shifts.
However, for now, the dominant long exposure suggests traders expect continued upside.
Source: IntoTheBlock
Is the inverted head-and-shoulders pattern signaling a breakout?
Ethereum continues consolidating within the $2,383 to $2,824 range while forming a clean inverted head-and-shoulders pattern.
Price recently rebounded to $2,515.80, gaining 0.87% on the day. The neckline resistance at $2,824 remains the key breakout level, while $2,383 acts as critical support.
Therefore, a confirmed move above the neckline could validate the bullish structure and push ETH toward the $3,000 mark.
Still, failure to break above resistance might delay upside momentum and trigger short-term consolidation.
Source: TradingView
Can ETH break above $2,824 and sustain its rally?
All signals — from address activity and TVL to Exchange Netflows and trader sentiment — tilt bullish.
But it all comes down to $2,824. A clean break above this neckline could trigger Ethereum’s next leg up.
Until then, volatility compression and long-heavy positioning could keep price trapped — or worse, flip the move into a fakeout.
