Key Points
- Ethereum exchange balances have reached a new low, indicating a potential supply shortage.
- Ethereum whales continue to accumulate despite recent market dips.
Ethereum’s [ETH] exchange balances have reached a new low, which strengthens the possibility of a supply shock for the largest alternative cryptocurrency. This has happened despite the recent market dip, as Ethereum whales continue to accumulate, according to on-chain analyst Leon Waidmann.
The Ethereum balance percentage has fallen to 10% as of August 10. This equates to approximately 12 million ETH on exchanges, a decreasing supply trend that could theoretically pave the way for a rally in ETH prices.
Decreasing Supply on Centralized Exchanges
This signifies that the available supply of Ethereum on centralized exchanges has dipped to an all-time low. It further highlights that investors are transferring their Ethereum holdings away from centralized exchanges for accumulation or self-custody. In most scenarios, this is seen as a bullish sign for Ethereum.
During the recovery from the price lows of $2.1k on August 5, the number of active Ethereum addresses increased by over 130K, growing from 440K to 571K by August 10. Over the same time frame, there was also a surge of over 60K in new addresses, highlighting robust growth in the Ethereum network.
ETH Price Action and Network Growth
However, the weekly demand for Ethereum from US investors was inconsistent, particularly in relation to Ethereum ETF flows. The products saw positive flows of $48.7 million and $98 million on Monday and Tuesday, scooping the dip. But from Wednesday to Friday, ETFs experienced a negative streak, amounting to $42 million in outflows.
Regarding price action, Ethereum’s overall recovery has nearly reached 30%, rising from $2.1K to over $2.6K at the time of writing. It has regained the crucial $2.5K level, but the previous range-lows at $2.9K have not yet been retested or reclaimed. Consequently, the range lows are a key level to monitor if the recovery continues into the new week. However, if the recovery gains were to retract, bulls would have to attempt to defend the $2.5k level.
