What Ethereum exchange holdings tell you about its price predictions
- ETH’s exchange reserve has fallen to an all-time low.
- ETH top whales have removed some of the coins from exchanges.
The amount of Ethereum [ETH] held on cryptocurrency exchanges has plummeted to an all-time low, according to data from Santiment.
Trending downward since February, the leading altcoin supply on exchanges has fallen by 28%. At press time, only 8% of the coin’s total circulating supply sits on exchanges.
This implies that only 9,615,238 ETH are held across all exchanges out of the coin’s circulating supply of 120,190,475 ETH.
The whales are up to something
The decline in ETH’s exchange reserve comes on the heels of a significant coin outflow from whale wallets observed within the past 24 hours.
In a post on X (formerly Twitter), Santiment noted that between 18th and 19th December, ETH’s top 10 largest wallets transferred a total of 240,000 ETH from their wallets, causing a 2.99% decrease in the overall amount of coins held in these wallets.
👍 As #Ethereum's market value hangs just above $2,170, the largest exchange wallets continue to move coins into smaller wallets or off exchanges entirely. 240K $ETH has been collectively moved from these wallets in 24 hours, a 2.99% drop in coins held. https://t.co/Fw7lKcVZan pic.twitter.com/AMFPDL4BXp
— Santiment (@santimentfeed) December 19, 2023
The data provider claimed these transfers were either made to smaller wallets or personal wallets.
The motives behind this whale movement remain unclear but could range from a shift towards long-term investment strategies to concerns about exchange security or broader market uncertainties.
Interestingly, amid the decline in market liquidity witnessed on 19th December, there was a notable rise in new demand for ETH.
Data from Santiment showed that the day saw the creation of 100,000 new ETH addresses, marking a 23% uptick from the previous day’s 81,000.
It also marked a single-day high in new wallet creation; the highest since 10th June.
This uptick coincided with the coin’s brief decline to $2,140 on that day. Therefore, it could be new entrants trying to “buy the dip” in anticipation of a price rally.
Yet, as indicated by the coin’s Moving Average Convergence/Divergence (MACD) indicator, signaling the onset of a bear cycle, ETH accumulation has slowed since 11th December.
Read Ethereum’s [ETH] Price Prediction 2023-24
Its key momentum indicators have since trended downward. At press time, ETH’s Relative Strength Index (RSI) was 52.5, while its Money Flow Index (MFI) was 52.80.
While these indicators remained above their respective neutral lines, indicating some ongoing coin accumulation, their downtrend positions suggested a notable increase in the momentum of coin distribution.