Ethereum Supply Shock Grows As Reserves Decrease, ETH 2.0 Contract Increases
18 Octubre 2021 - 2:00PM
NEWSBTC
The Ethereum supply shock has been growing as exchange reserves
continue to decrease and value staked in ETH 2.0 contract rises.
Ethereum Supply Shock: Exchange Reserves Go On Decreasing While ETH
2.0 Staking Contract Grows In Value As pointed out by a CryptoQuant
post, ETH exchange reserves have been decreasing while the coins
locked in the staking contract have been rising. The “all exchanges
reserve” is an Ethereum indicator that highlights the total number
of coins stored in wallets of all exchanges. When the value of this
metric goes up, it means there is an increase in the supply of ETH
on exchanges. Such a trend may show that there is a selling
pressure in the market as investors are sending these coins to
exchanges for withdrawing to fiat or altcoin purchasing. A
decrease, on the other hand, would imply the supply of ETH is going
down as investors take their crypto off exchanges for hodling or
selling through OTC deals. This behavior may show that buyers feel
bullish on the coin’s future. Related Reading | Only In
Crypto: A Croissant Lists Potential Bullish Drivers For Bitcoin And
Ethereum In Q4 2021 Now, here is a chart that shows the trend in
the all exchanges reserve for ETH: The indicator's value looks to
be decreasing while ETH 2.0 total value staked is moving up |
Source: CryptoQuant As the above graph shows, the Ethereum exchange
reserves have been steadily heading downwards since quite some time
now. This is despite ETH’s recent sharp increase in price. It seems
investors are willing to hold on as they believe the price will
appreciate even further. Related Reading | TA: Ethereum
Outperforms Bitcoin, What Could Extend Gains Above $4K This is
creating a supply shock in the market. An increase in demand from
big whales like institutional and retail investors now can blow the
price up. In fact, on-chain data suggests institutional investors
have already started getting involved in the crypto as 400k ETH
exited the crypto exchange Coinbase a few days back. By the way,
the chart from before also includes the value currently staked in
ETH 2.0. As this contract is seeing a steady increase in the number
of coins being locked, it looks likely that some of the supply
going off exchanges is going into this contract. This further backs
the idea that investors are in Ethereum for the long term. ETH
Price At the time of writing, Ethereum’s price floats around $3.8k,
up 5% in the last seven days. Over the past month, the crypto has
gained 9% in value. The below chart shows the trend in the value of
the coin over the last five days. ETH's price has moved rather
sideways in the last few days | Source: ETHUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com,
CryptoQuant.com
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