Top Ethereum whales are HODLing at an "impressive rate," data finds

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Top Ethereum whales are increasingly moving their funds off exchanges, on-chain data show.

Second, the continuous demand from decentralized finance has strengthened Ethereum's fundamentals.

Throughout 2020, especially in the second and third quarters, Ethereum front ran Bitcoin amidst a marketwide recovery.

In the past week, Ethereum has rebounded relatively slowly compared to Bitcoin, which is already nearing the $12,000 resistance area.

A key narrative around Ethereum heading into 2021 is ETH 2.0 and scaling.

Ryan Sean Adams, a cryptocurrency investor, said Ethereum rollups and sidechains would become a major trend next year.

Vitalik Buterin, the co-creator of Ethereum, said in early October that rollups could increase the blockchain capacity by 100-fold.

"It's happening. We're now in the era where new projects are launching on Ethereum rollups and sidechains instead of mainchain. This will be a major trend heading into 2021. This is how Ethereum scales."

The confluence of growing user activity due to the expansion of DeFi and the optimism around scaling is likely restoring the confidence of whales in Ethereum.

Ethereum also has room for recovery in the upcoming months because of the DeFi market correction from September to October.

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