Bitcoin, Ethereum On Exchanges Drop To New Lows, What A Supply Squeeze Would Mean For The Market

As a seasoned crypto investor with a keen interest in market trends, I find the recent data on the significant drop in Bitcoin (BTC) and Ethereum (ETH) supply on exchanges to be an exciting development. The fact that exchange balances for both tokens have reached their lowest levels in years, with Bitcoin at 11.6% and Ethereum at 10.6%, suggests that large crypto whales have been accumulating these tokens and moving them to self-custody.

Based on the latest figures, the amount of Bitcoin (BTC) and Ethereum (ETH) held on cryptocurrency exchanges has noticeably decreased. Consequently, these two leading digital assets could be poised for substantial price increases due to a potential supply crunch approaching.

Supply Of Bitcoin And Ethereum Drop To New Lows

Expert: According to BTC ECHO analyst Leon Waidmann, recent Glassnode data indicates that the quantity of Bitcoin and Ethereum held on cryptocurrency exchanges has reached a multi-year low. Specifically, approximately 11.6% of Bitcoin’s total supply and 10.6% of Ethereum’s total supply are currently stored in exchange wallets. This data implies that large crypto investors, often referred to as “whales,” have been actively withdrawing these digital assets from exchanges for personal custody.

Bitcoin, Ethereum On Exchanges Drop To New Lows, What A Supply Squeeze Would Mean For The Market

I’ve analyzed the situation and want to emphasize the importance of the current development. A supply crunch is around the corner, which could lead to a surge in Bitcoin and Ethereum prices given the prevailing trend of accumulation among investors instead of selling off their assets. So, my recommendation for you is to prepare yourself for the upcoming significant price movement.

It’s intriguing that according to crypto analyst Ali Martinez, this withdrawal of approximately 777,000 ETH worth around $3 billion from cryptocurrency exchanges may have started after the SEC gave its approval to Spot Ethereum ETFs. He made this observation in a recent post on platform X (previously known as Twitter).

Upon their release, Spot Ethereum ETFs are anticipated to significantly fuel the ongoing bull market. Consequently, it’s no wonder crypto behemoths are keen on preparing their positions prior to this event. According to Bloomberg analyst Eric Balchunas, these funds could commence trading as early as July.

Despite the caution from research firm Kaiko that Ethereum’s price may not soar to new all-time highs immediately due to potential outflows from Grayscale’s Spot Ethereum ETF, it is important to note that Ethereum could encounter substantial selling pressure. This prediction stems from the significant outflows, totaling $6.5 billion, observed in the first month of trading for Grayscale’s Spot Bitcoin ETF, leading to a noticeable downturn in Bitcoin’s price.

ETH Could Hit A New All-Time High In Record Time

Expert: Michael Nadeau, a cryptocurrency analyst, posits that Ethereum might reach a new all-time high (ATH) quicker than Bitcoin did after the commencement of trading for Spot Ethereum Exchange-Traded Funds (ETFs). The reason being, Ethereum encounters less “structured selling” compared to Bitcoin due to Ethereum validators not needing to sell their holdings to cover operational costs, unlike Bitcoin miners.

He also highlighted that 38% of Ethereum’s supply is locked on-chain and claimed that “ETH is more reflexive than BTC.” He further explained that this reflexivity is evident in how Ethereum leads in on-chain activity, which leads to more ETH burned. Considering this, Grayscale’s outflows may not impact Ethereum’s price as they did on Bitcoin’s price, which could cause the second-largest crypto token to hit a new ATH in no time. 

Bitcoin, Ethereum On Exchanges Drop To New Lows, What A Supply Squeeze Would Mean For The Market

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2024-06-03 21:04