Key Points
- Ethereum’s price has dipped below $4,000 but metrics indicate potential for resurgence.
- Supply of Ethereum outside exchanges continues to exceed supply within exchanges.
Ethereum recently experienced a surge beyond the $4,000 price range, hinting at the possibility of exceeding its previous all-time high.
Despite the subsequent dip below $4,000, certain indicators suggest a potential recovery and the chance of a new all-time high is still in sight.
Exchange Reserve Metric Indicates Strength
According to new data from CryptoQuant, Ethereum is showing resilience based on its exchange reserve metric. Over the past few months, this metric has been on a steady decline, indicating that holders are withdrawing their assets from exchanges, showing a reluctance to sell.
However, a different trend is observed on Santiment. Since January, there has been an increase in the supply of Ethereum on exchanges, rising from roughly 10 million to over 13 million. This suggests that more traders are depositing their assets onto exchanges, likely to capitalize on the recent Ethereum price surge.
Supply Analysis
Comparing the supply of Ethereum outside of exchanges to the supply within them provides a clearer understanding. The supply off exchanges has been relatively steady recently, with the volume exceeding 121 million at the time of writing. This indicates a significant amount of Ethereum is being held outside of exchanges.
Ethereum’s performance on a daily timeframe shows a significant decline of over 3% by the end of 14th March, with prices settling around $3,870. This retreat is from the $4,000 price level earlier in the week. However, the decline has deepened further, with prices falling by over 5% to approximately $3,680. These declines are the most significant and consecutive drops since around 24th February.
Despite this downturn, data on the supply of Ethereum on exchanges suggests that this may be a temporary setback. The supply off exchanges still significantly exceeds the supply on exchanges, indicating a substantial amount of Ethereum is being held outside trading platforms.
Continued Interest in Ethereum
An analysis of the total number of Ethereum holders on Santiment reveals continued growth over the months. At the time of writing, the number was approaching 117 million. This ongoing increase suggests sustained interest from holders who continue to accumulate Ethereum.
The accumulation trend remains a bullish sign for Ethereum, despite its recent price decline. This is especially true when considered alongside the significant volume of Ethereum held outside of exchanges.
