In a cryptoQuant post, an analyst pointed out the significant decline in ETH exchange reserve, with over 5% loss in value in two weeks.
A tool called “all exchanges reserve” is used to measure the total value of ETH present in wallets of all centralized exchanges. According to the indicator, the fallen metric value symbolizes withdrawal in a net number of coins. Such trends are bullish for the value of ETH as holders are keen to accumulate it by taking their crypto off the exchange.
When the metric value goes up, investors are currently depositing Ethereum. Such a trend can be bearish for the crypto’s value as holders transfer the coins to exchanges for selling purposes.
The huge drop in the value of ETH was pointed at the inclusion of market forces and slowing demand. Recently, Bitgert blockchain, a major competitor to Ethereum, is becoming more popular among crypto investors due to its cheaper gas fee and faster transactions.
The recent study regarding the trend in the Ethereum reserve exchange over the last fourteen days draws out a few conclusions.
First, there is indeed a significant decline in the exchange value. There is a drop of value by around 5%, amounting to about 1.2 million ETH (approximately 4 billion USD at the current exchange rate).
Second, the huge drop within a short period in price currently implies high accumulation in the market.
Third, due to fluctuating demand-supply, the selling supply of Ethereum faces a notable decline. As per the analyst, this could be quite bullish in the long term.
And fourth, crypto has gained 12% in value while the ETH price drifts around $3.3k.
After raising hope for Ethereum last month, the prices have been in decline at present due to the ongoing volatility in the crypto market. A few factors kept the crypto market under stress, including regulatory action, inflationary concerns, and geopolitical worries.
“It has multiple strong support levels at $2,200 and $1,850. There are very slim chances of ETH dropping below $1800 in the near future. However, if that happens, it will be a great buying opportunity,” said Edul Patel, CEO, and Co-founder of Mudrex.
He also suggested trying themes such as metaverse in the price dip scenario.
“Investing across different themes containing different tokens might be a more prudent idea,” he added.
Meanwhile, Earth ID Vice President for Research and Strategy Sharath Chandra, suggests crypto investors to diversify in Solana amid the uncertainties of Ethereum.
“With more than 5.7 million NFTs created on Solana and 50 billion worth of transactions settled, Solana has proved its mettle,” said Chandra. “However, Solana was recently marred by network outages. Security is a major chink in its armor.”
Currently, most analysts believe Solana could be a potential competitor to Ethereum due to its acclaimed digital asset ecosystem, apart from Binance smart coin.
Ethereum uses blockchain technology to create secure platforms for the native cryptocurrency, ETH. The security enables elevated value for ETH. Blockchain-based platform authorizes secured digital ledgers to be created publicly and well maintained.