A shift has occurred in the ethereum market as rising exchange reserves signal a possible new phase of distribution that coincides with growing concerns over a death cross.
This is evidenced by CryptoQuant’s ethereum Exchange Reserve metric, which tracks the amount of eth stored in exchange wallets.
ethereum in danger
When the metric is rising, it typically indicates that traders are moving their eth to exchanges in preparation for selling, which can increase supply pressure and contribute to a downtrend. This was observed between June and August, when the metric was on a steady upward trend, coinciding with a significant bearish shift in ethereum’s price.
The situation has become more complex following the death cross, a technical pattern in which the 100-day moving average falls below the 200-day moving average, which often indicates a long-term downtrend.
Following this development, the exchange reserve metric has spiked again, suggesting that a new phase of distribution may be unfolding as traders continue to dump their holdings according to the latest report from a CryptoQuant analyst. Observations.
This increase in the reserves is a potential warning sign as it indicates that more eth is available for sale, which could push prices down even further if demand does not increase.
Poor feeling
ethereum spot ETFs, which were expected to drive the price of the crypto asset higher, eth-spot” target=”_blank” rel=”noopener” data-wpel-link=”external”>witnessed $477 million in outflows since its launch this summer. Adrian Fritz, the head of research at 21Shares, which launched a spot ethereum ETF, bitcoin-etfs-take-50-billion-baby-steps-toward-big-time-2024-09-03/” target=”_blank” rel=”noopener” data-wpel-link=”external”>saying,
“A lot of people were excited up until the launch, and then it became a kind of ‘sell the news’ event. With more education and more time, we will also see more excitement around ether.”
But lack of institutional interest is not the only factor affecting ethereum. Brian Rudick, a researcher at cryptocurrency trading firm GSR, x.com/thetinyant/status/1828547107978125391″ target=”_blank” rel=”noopener” data-wpel-link=”external”>suggests that the main reason for the crypto asset's underperformance is the poor sentiment around its accumulation-focused roadmap, particularly after network fees have dropped significantly.
This has raised questions about ethereum’s positioning, with some arguing that it is “stuck in the middle” between bitcoin, seen as the ultimate store of value, and Solana, considered the leading high-performance blockchain.
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