Ethereum [ETH] may appear to be trading sideways around the $2,500 level, but under the surface, there’s mounting evidence that a major move could be on the horizon. Despite the market’s subdued reaction, a growing number of analysts believe that Ethereum is laying the groundwork for a breakout — one that could eventually send the asset surging toward the highly anticipated $10,000 mark.

At first glance, Ethereum’s price action seems uninspiring. It has remained range-bound, showing little movement even as the broader crypto market begins to stir. However, technical analysts point to the formation of a long-term wedge pattern — one that has historically preceded upward explosions in price. According to popular analyst MilkybullCrypto, Ethereum is pressing against the upper boundary of this pattern, and if history repeats itself, it could signal the beginning of a parabolic rally.

But it’s not just the charts that are flashing bullish signals. Ethereum’s fundamentals continue to strengthen. As the leading smart contract platform, Ethereum remains at the center of decentralized finance (DeFi) and Web3 innovation. Layer 2 solutions are gaining adoption at a rapid pace, helping to scale the network while reducing gas fees — a key factor in Ethereum’s long-term growth story. Meanwhile, competitors like Solana and Tron have recently rebounded strongly, pointing to renewed interest across Layer 1 ecosystems.

More compelling than technical setups or rival activity, however, is what’s happening on-chain. While ETH’s price remains calm, whale behavior tells a different story. In early May, whale transactions over $1 million surged to a five-month high, indicating large holders may be positioning for a major move. These are often considered precursors to price volatility, as big money shifts typically happen before broader market trends emerge.

Supporting this view is Ethereum’s growing Total Value Locked (TVL) in DeFi protocols. After dipping below $55 billion in April, the TVL has rebounded sharply to nearly $63 billion in May. This resurgence reflects increasing activity and confidence in Ethereum’s ecosystem, even as price action lags behind. In addition, Ethereum is attracting over $41 million in daily inflows, and active wallet addresses remain high at over 361,000 — another sign that user engagement and investor interest are holding steady.

However, the path to $10,000 will not be without its challenges. One major concern is the recent outflow trend from Ethereum ETFs. After a strong period of inflows in late 2024, institutions appear to be pulling back, with capital rotating into other assets like Solana and Litecoin. This shift may signal declining institutional confidence in the short term.

There’s also the issue of exchange inflows. Large ETH transfers to centralized exchanges have increased, often a sign of potential sell-offs. If major holders begin cashing out in significant volumes, it could suppress upward price movement or even trigger short-term corrections. Add to this the continued uncertainty around global crypto regulations, and it’s clear that Ethereum faces a complex and unpredictable environment as it attempts to break out.

Despite these obstacles, the core argument for a long-term rally remains intact. Ethereum’s network fundamentals are robust, Layer 2 adoption is accelerating, and whale accumulation suggests that large investors are still bullish on future gains. The price may be taking a breather, but many believe this is the calm before the storm.

In summary, Ethereum’s current stagnation at $2,500 may be deceiving. Behind the scenes, technical charts, DeFi growth, and whale activity all point toward a potential breakout — one that could send ETH soaring to $10,000 or beyond. Yet, with institutional shifts and regulatory headwinds still looming, investors should remain cautious. If the breakout comes, it may reward those who positioned early. But the journey, as always in crypto, won’t be a straight line.