Key Points
Ethereum’s Exchange Reserves and Buying Activity
Since the start of this year, Ethereum’s exchange reserves have been on a downward trend. This suggests that purchasing activity has been exceeding coin distribution.
Data from CryptoQuant reveals that over 800,000 Ether, worth about $2.4 billion, have flowed out of Ethereum [ETH] exchange reserves since the year’s start. This indicates that since January, coin holders have been buying more ETH than they have been selling on exchanges.
As of now, on-chain data provider information shows that ETH’s exchange reserve stands at 13 million ETH. This is a 6% decrease since the beginning of the year.
The high accumulation volume this year has led to a significant increase in ETH’s value. Currently trading at $2,950, the leading altcoin’s price has risen by 32% since January 1st.
Ethereum Holders in Profit
ETH’s recent surge above the $2900 price point has put a large number of its holders in profit. According to IntoTheBlock data, only 2 million addresses are holding the altcoin at a loss. These addresses acquired their coins when ETH was trading between $2993 and $4811 during the 2021 bull market peak.
On the other hand, a staggering 92 million addresses are “in the money”. This means that if these addresses sold their coins at the current market value, they would make a profit on their investments.
AMBCrypto evaluated ETH’s Market Value to Realized Value (MVRV) ratio on a 30-day moving average to measure profitability. According to Santiment data, this has increased by 18% in the last month, moving from 50% to 59%.
With an MVRV ratio of 59% at the moment, each ETH holder would be guaranteed at least 50% profit if they sold their coins at the current market price.
As selling pressure decreases, key momentum indicators examined on a 24-hour chart have been found in overbought zones. For instance, ETH’s Relative Strength Index (RSI) and Money Flow Index (MFI) are currently 71.86 and 74.59, respectively.
When these values are reached, a coin is considered to be overbought. Buyer exhaustion is common at these highs, as market bulls often struggle to sustain further price rallies. This usually leads to a temporary price pullback.
Furthermore, the coin’s price traded significantly close to the upper band of its Bollinger Bands (BB) indicator, confirming the overbought nature of the market.
When an asset’s price approaches or trades above this upper band, it indicates that the asset’s value has significantly increased compared to its recent average levels. Traders often view this as a sign that the asset may be reaching a short-term peak in price, and a potential reversal could be imminent.
