Ethereum appears to be stabilizing after a sharp correction. ETH is trading near $2,950 after falling about 15.6% from its January highs before breaching key support. While Ethereum's price movement still seems weak on the surface (down 11% weekly), several fundamental signals suggest that conditions may change.
The complete reset of bearish momentum, aggressive whale accumulation, and the sudden recovery in network usage are now starting to intensify. Together, these signals raise an important question: Is Ethereum gearing up for a stronger recovery, or is this just a short-term bounce?
The downward collapse is evident with volume divergence and whale intervention.
Ethereum's recent weakness did not appear suddenly. Between January 6 and January 14, ETH recorded a downward divergence on the Relative Strength Index (RSI) on the daily chart. While the price pushed to a higher high, the RSI, a momentum indicator, formed a lower high, a setup that often signals trend exhaustion.
This signal was executed cleanly. Ethereum corrected about 15.6%, sliding to the support area of $2,860 before stabilizing.
What changed in support is significant.
With price trends declining (between January 20 and January 21), the On-Balance Volume (OBV) formed a higher low, indicating weak selling pressure and that larger buyers were absorbing supply rather than exiting. OBV tracks volume flow, and this type of divergence often appears near local bottoms.
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It seems that whales reacted to this shift.
Over the past twenty-four hours, the Ethereum holdings held by whales (excluding exchanges) increased from 103.73 million Ethereum to 104.08 million ETH. This represents an addition of approximately 350,000 Ethereum in one day.
At the current ETH price, this accumulation is worth just over $1.03 billion.
This indicates that the whales did not buy the top. They entered after the momentum reset and tested the key price support, considering the correction as an entry rather than an exit. But this may not be the only reason.
Ethereum reclaimed second place in unique daily addresses, surpassing SEI.
The technical setup is not the only thing improving.
At the time of publication on January 23, Ethereum reclaimed second place in Layer 1 DUA (unique daily addresses) behind BNB, as exclusively determined by BeInCrypto analysts. It just surpassed SEI (another Layer 1), which has recently seen strong activity due to gaming-related growth. opBNB (BNB's Layer 2), another recurring competitor, remains higher.
This is important because unique daily addresses reflect actual network usage, not price speculation. Ethereum reclaiming this position indicates that on-chain activity as Layer 1 is recovering even as the price remains below recent peaks. SEI has been Ethereum's long-standing adversary.
Additionally, Ethereum continues to outpace all major Layer 2 systems in terms of address growth.
This recovery has already begun to turn into social chatter.
Ethereum's social dominance surged sharply from about 0.37% to 4.43% since yesterday, peaking briefly near 5.8% before cooling off. Historically, local peaks in social dominance have preceded short-term price advances for ETH. This is the same period when whales accumulated over $1 billion of ETH.
For example:
On January 17, a rise in local social dominance was followed by a corresponding 2.1% increase in profits during the following sessions.
On January 21, a new increase preceded a 3.4% upward movement in 24 hours.
This does not guarantee a rise, but it shows that renewed network importance has previously translated to short-term price follow-through. Returning to second place in unique daily addresses (at the time of publication) provides a fundamental reason for increased interest.
Ethereum's price levels now hold the key.
From here, Ethereum's structure is clear.
On the bearish side, $2,860 still remains the critical support. This level marked the end of the 15.6% correction and is where whales entered aggressively. A clean loss of this area would weaken the bullish case and open the direction towards lower support.
On the bullish side, ETH needs to clear $3,010, which is only 2.6% higher than the current price, to confirm short-term strength. If the upward movement continues, $3,350 will become the focal point, a resistance area that has defined price since mid-January.
If this level breaks, Ethereum's price may target higher extensions near $3,490 and $3,870. However, failing to hold $2,860 will refocus attention on $2,770, negating the rebound hypothesis.
