Behind Ethereum's Breakout Rally: Institutional Continuous Entry, BPO Upgrade Accelerates Layer-2, but RSI Signals Overbought Warning

【Crypto World】Ethereum’s recent rally is quite fierce. A 1.13% increase over 24 hours isn’t much, but nearly 9.60% over seven days stands out, especially in the context of a sluggish overall crypto market.

From a capital perspective, on January 6th alone, there was a net inflow of $114.7 million into spot Ethereum ETFs, indicating that institutions are indeed increasing their positions. The underlying logic is clear— the BPO hard fork activated on January 8th increased the blob capacity of individual blocks, directly reducing Layer-2 rollup costs, which aligns perfectly with Vitalik’s “rollup-centric” roadmap. Technical and capital factors are working together.

On-chain data is even more interesting. Over the past month, whales have net accumulated over 3.62 million ETH, while ETH reserves on exchanges hit a nine-year low. This pattern of “big players hoarding, exchanges selling” is often a bullish signal—true holders are locking their assets, and circulating supply is shrinking.

But a reality check is needed. The current RSI has already surged to 64, a typical overbought signal. Short-term volatility risks are significant. From a technical perspective, resistance is at $3,307 (corresponding to the 100-day moving average), and support is at $3,132 (50-day moving average). This range represents the recent trading space. Continuous institutional inflows are positive, but don’t get carried away by the rally—overbought conditions often precede reversals.