Ethereum Rallies 9% as Whale Buying Builds While Funding Rates Signal Overheating

Ethereum has posted a sharp short-term rally, but on-chain supply signals and derivatives indicators are offering conflicting clues on its near-term direction.

Crypto outlet CoinDoo reported on Aug. 14 that Ether rose about 9% over the past 24 hours and was trading around $2,374.

On-chain data showed accumulation by large holders. Santiment data showed the number of wallets holding more than 100,000 ETH increased to 57 from 54 over the past week. Three new whale wallets emerged as Ether broke above $2,250.

The market has interpreted the increase in whale wallets as strategic asset allocation rather than simple momentum chasing, with similar moves in the past often acting as a signal that price gains would continue.

The relative strength index, or RSI, also supported the bullish momentum. The RSI rose above 70, entering bullish territory, while the gap with its signal line widened, indicating the upward momentum was holding.

Ethereum has also outperformed Bitcoin on a relative-strength basis. The ETH/BTC ratio climbed to its highest level since late January, suggesting capital was moving selectively into Ether rather than simply lifting both tokens in tandem.

Still, derivatives indicators are flashing caution. CoinDoo said current funding rates have risen to levels similar to the previous two ETH/BTC peak periods, and those earlier instances were followed by price pullbacks.

The next move may hinge on which signal leads. If whale accumulation reflects the formation of a structural bottom, the rally could continue. If the move is being driven by crowded leveraged positions, however, a short-term correction cannot be ruled out.