Ethereum (ETH) has gained more than 11.6% in the last seven days as the price continues to target $5,000. In the midst of this bullish outlook, CryptoQuant insights suggest that Ethereum could soar to $10,000 if current global liquidity trends persist, particularly the M2 conditions.
Ethereum exchange outflows and staking data signal bullish setup
Notably, M2 refers to the total amount of money in circulation and indicates how much liquidity is available in the economy. This includes cash, checking deposits and accessible savings. Current statistics show that in the past three years, the U.S. M2 money supply has spiked to $22.2 trillion.
This has caused a 130% increase in Bitcoin’s price since 2022, as interest rates continue to decline and spending is stimulated. Currently, Bitcoin has found a level of stability at the $124,000 price range and looks like it has potential for further uptick.
Could Expanding M2 Push ETH Toward $10K?
“If global liquidity continues to expand and the structural outflow from exchanges persists, Ethereum could realign with M2 growth and enter a new revaluation phase. In that scenario, $10K is far from unrealistic.” – By @xwinfinance pic.twitter.com/mk4jOUFcdX
CryptoQuant believes that Ethereum might be next in line to witness a spike. It, however, noted that the asset is lagging behind when compared with Bitcoin’s 130% growth. Ethereum has only managed a 15% increase, which suggests a clear "liquidity lag."
However, technical indicators suggest that Ethereum might rally soon as exchange reserves are currently down. The total volume of Ethereum on exchanges is about 16.1 million, and with fewer coins available, selling pressure will decrease.
Additionally, Ethereum holders are moving their assets from exchanges to self-custody or staking. This suggests that the investors are not planning to sell anytime soon. These conditions are right for a bullish rally to occur on Ethereum.
Based on historical precedence, when Bitcoin leads in early bull cycles, capital usually rotates into altcoins, especially Ethereum. If this plays out and Ethereum outperforms core rivals, the coin could soar to $10,000.
The confidence in this prediction relies on the expanding M2, reduced supply, increased staking and institutional demands. If these trends continue, $10,000 remains achievable in the ongoing market rally.
Ethereum price outlook
As of press time, the Ethereum price was changing hands at $4,587.43, which represents a 1.05% increase in the last 24 hours. However, with the asset inching into overbought territory with a Relative Strength Index of 66.57, trading volume is on a decline.
Within this time frame, the metric has dropped by 24.79% to $31.64 billion. It appears market participants are exercising caution as they anticipate possible profit-taking from retail traders as the asset approaches $5,000. This could trigger a temporary reversal in price outlook.
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