Ethereum (ETH) Selling Pressure Expected to Ease as Exchange Balances Decline

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As a seasoned crypto investor with several years of experience in the market, I’ve seen my fair share of volatility and price swings. The recent trend of decreasing Ethereum (ETH) balances on major exchanges is a promising sign for the community, indicating that fewer investors are looking to sell their holdings. This could potentially stabilize prices in the near term and pave the way for a future rally.

As a researcher studying the Ethereum (ETH) market, I’ve noticed some intriguing trends emerging recently. Specifically, there has been a noticeable decrease in the amount of ETH being held on major cryptocurrency exchanges. This could potentially signal that investors are no longer selling off their ETH holdings at an alarming rate, providing some relief to those who have been bearing the brunt of recent selling pressures.

The downward trend indicates that there are currently fewer Ethereum investors wanting to offload their assets. This could help keep prices relatively steady over the short term.

Ethereum (ETH) Selling Pressure Easing

As a researcher studying trends in the cryptocurrency market, I’ve discovered some intriguing insights from data provided by blockchain analytics firm Glassnode. Specifically, there has been a significant decrease in the quantity of Ethereum (ETH) held on exchanges over the last two months. The exchange balance for ETH has gone down from 13.34 million to 12.21 million ETH. This reduction in exchange balances is often an indicator that traders and investors are transferring their ETH to personal wallets or decentralized applications. This shift suggests that there may be a decreased intent among these individuals to sell their ETH immediately.

During the same timeframe, ETH‘s exchange balances decreased in tandem with wider market fluctuations. Notably, ETH underwent significant volatility between July 1 and July 8, plunging by nearly 18% to reach a low of $2,826. Subsequently, the cryptocurrency rebounded to around $3,122 as of writing. This market instability resulted in over $300 million worth of leveraged long positions being liquidated, amplifying uncertainty within the market.

Institutional Interest and Long-term Holding Trends

In spite of the unpredictable cost fluctuations, there’s a guarded sense of optimism among market participants, as indicated by on-chain and derivatives data. The Ethereum derivatives market reveals a strong inclination towards call (buy) options rather than put (sell) options, with call option requests outpacing put option demands twofold. This trend underscores the bullish stance of traders, implying their belief in Ethereum’s potential rebound and subsequent price surge.

Approximately 40% of Ethereum’s circulating supply is now being held in staking and decentralized applications (dApps). This signifies a firm commitment from investors to keep their Ethereum instead of selling it in the near future. Notably, Golem, a significant Ethereum holder with a large stash of ETH, has ceased selling activities following a wave of liquidations. According to recent reports, Golem has staked 40,000 ETH ($124.6 million), further emphasizing the growing trend among major holders to retain their assets rather than sell them.

The Golem project’s Ethereum account (Golem@golemproject) seems to have ceased trading $ETH recently. Approximately 8 hours ago, it staked a substantial amount of 40,000 $ETH, equivalent to around $124.6 million.
— Lookonchain (@lookonchain) July 11, 2024

Expert analysis by Leon Waidmann underscores the importance of this emerging trend. He notes that institutional investment in Ethereum (ETH) is likely to surge ahead with the upcoming launch of an ETH Exchange-Traded Fund (ETF). The combination of increasing institutional demand and dwindling exchange supplies may foster price stability for ETH, setting the stage for a potential future price rally.

🔒 40% of #Ethereum’s supply is basically locked up!
🪙 28% staked. 🔗 12% in smart contracts & bridges.
With the imminent trading start of the #ETH ETF, institutional interest is set to rise.
📉 Exchange supply is shrinking.
📈 $ETH is primed for a price rally!
— Leon Waidmann | Onchain Insights🔍 (@LeonWaidmann) July 10, 2024

Ethereum’s Ecosystem Strength and Layer-2 Solutions

The total value locked in Ethereum remains stable at approximately 17.7 million ETH, signifying vibrant action within its decentralized application (dApp) ecosystem and layer-2 solutions. Over the past month, Ethereum’s layer-2 platforms like Arbitrum, Blast, and Base have experienced significant growth in transaction volumes, surpassing their competitors, BNB Chain and Solana, in terms of activity.

As a crypto investor, I’m keeping a close eye on the Ethereum market as it goes through some fluctuations. I believe many other investors and traders are doing the same, preparing for a possible price bounce back above previous support levels. The collective hope is that Ethereum will surpass its yearly all-time high (ATH) that we set earlier in the year.

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2024-07-11 13:53