The supply of Ethereum on centralized exchanges (CEX) has hit an all-time low. Recently, 4.1 million ETH was withdrawn from these platforms in just 10 days. Currently, there are only 12 million Ethereum on CEXs, or 10% of the total supply, which is the lowest since 2016.
“Investors have withdrawn 4.1M ETH from central exchanges in 10 days, leaving only 12M ETH or 10% of Ether supply in central exchanges. ETH in central exchanges at lowest level since 2016! No one fully grasps how bullish this is coupled with an ETF launch,” crypto analyst Leon Weidman tweeted.
Looking at the chart, we can see that the supply of Ethereum on exchanges has been steadily decreasing over the past few years, while the price of ETH has been increasing overall. This trend indicates that investors are moving ETH into private wallets, indicating long-term holding and confidence in Ethereum’s future.
This change coincides with positive sentiment surrounding the launch of an Ethereum-based ETF, which is expected to boost institutional interest and investment in Ethereum. The combination of declining exchange balances and the launch of the ETF suggests a brighter market outlook for Ethereum, as reduced supply on exchanges typically reduces selling pressure and makes it less likely for prices to rise.
Ethereum Price Analysis
Currently trading at $3,425, Ethereum has undergone a brief consolidation and correction phase before reaching a key support zone. Located in the $3,285 to $3,420 range, this zone coincides with key Fibonacci levels and the crucial 100-day moving average near $3,400, highlighting its importance.
A fierce battle is expected between buyers and sellers at this key price range, increasing market volatility and the likelihood of liquidation. The outcome will have a major impact on Ethereum’s next trend. If the sellers prevail and break this support, a drop is expected towards the 200-day moving average at $2,996.
On the 4-hourly chart, Ethereum has formed a head and shoulders pattern and is indicating bearish momentum as it breaks below the neckline. A descending flag pattern has emerged which could indicate a possible bullish reversal if it breaks out of the upper limit.
Currently, Ethereum price is hovering around this crucial support, a breakdown below which would suggest a move towards $2.9K, while a reversal could target $3.6K.
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