The amount of Ether stored on centralized crypto exchanges is at an unprecedented low, which could result in a supply squeeze, say analysts.
Ether (ETH) exchange balances fell to 8.7% on Thursday last week, the lowest they have been since the network launched in mid-2015. The amount of the asset held on exchanges remained low at 8.8% on Sunday, according to Glassnode data.
The amount of ETH on exchanges has declined by 43% since the beginning of July, which was around the time when digital asset treasury (DAT) purchasing started ramping up.
“ETH is quietly entering its tightest supply environment ever,” commented macro investment research feed “Milk Road,” which added that it was “a level we’ve never seen before.”
Compared to this, the amount of Bitcoin on exchanges was higher, at 14.7%, according to Glassnode.
ETH keeps getting pulled into places that don’t sell, such as staking, restaking, layer-2 activity, DATs, collateral loops, and long-term custody, added Milk Road, suggesting that a supply squeeze could drive price momentum.
BTC vs ETH stored on exchanges. Source: GlassnodeVolume momentum indicator signals buying strength
Analyst “Sykodelic” said on Friday that there was an On-Balance Volume (OBV) — a volume-based momentum indicator — breakout above resistance.
However, the price was rejected, which is a classic divergence signaling hidden buying strength that often precedes upside moves.
Related: Why CFTC-approved spot Bitcoin, Ethereum trading is a ‘massively huge deal’
“Mix that with the fact that the PA [price action] just looks bullish, I think we’re going to see high before any meaningful pullback,” they added.
Ether OBV breaks above resistance. Source: SykodelicETH holds on to $3,000
Ether prices have mostly held above $3,000 for the past five days, but could not break resistance at $3,200.
Over the past 24 hours, the asset has consolidated around the $3,050 area, where it currently stands.
Ether price performance against Bitcoin also caught attention last week with the ETH/BTC pair breaking above the downtrend line.
Magazine: Indian investors look beyond Bitcoin, Japan to soften crypto tax: Asia Express
Source: https://cointelegraph.com/news/ether-exchange-balance-falls-to-an-unprecedented-low?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
