The Ethereum (ETH) reserves at centralized fairs have fallen to the lowest level since 2016, which may indicate an imminent supply shock.
This means that the supply of ETH is decreasing at trade fairs, while demand may remain strong. Historically, such a situation often leads to price increases, which makes the prospect for Ethereum Bullish.
Historically low level since 2016
According to Data from Cryptoquant, the Ethereum reserves at stock exchanges on 18 February were only 18.95 million ETH. This is the lowest level since July 2016, when the price of Ether fluctuated around $ 14.
A decrease in stock exchange reserves is usually seen as a positive signal. It means that investors move their ETH to Cold Storage instead of keeping them available for sale, which reduces sales pressure.
Can scarcity cause a price rally?
A decreasing ETH offer for trade fairs is often considered an important motivation for price increases. In the cryptomarkt it is a well -known phenomenon that a low stock market stock often goes together with strong price movements.
Nevertheless, Ethereum remains in performance for the time being. The price has already fallen by 19% this year and has little convincing momentum in the longer term.
According to Nicolai Sondergaard, research analyst at Nansen, this development shows strong similarities with what is currently happening at Bitcoin (BTC):
“We see similar trends at BTC, which reminds me that we see a question that surpasses the supply. It can also mean a natural shift towards self -storage and cold storage. Anyway, I see this as positive for both, even if the above reasons are probably not the only factors behind this shift. ”
Strike for Ethereum ETFs can grow in question explosively
Another important motivation for the Ethereum prize is the upcoming introduction to Ethereum Exchange-Traded Funds (ETFs). As a result, ETF-publishers could pay strike rewards to investors, which considerably increases the attractiveness of these funds.
With an average return of around 5%, this would function as a dividend payment for ETF holders. This can greatly increase the demand for Ethereum ETFs, which in turn can have a positive influence on the ETH race.
Resistance levels and potential liquidations
Despite all this positive news, Ethereum is still technically in a downward trend. In the short term, ETH experiences strong resistance around $ 2,750 and $ 2,800.
If the price broke out above $ 2,800, short positions worth $ 822 million can be liquidated, according to data from Coinglass. This could give an extra upward impulse to the ETH prize.
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Source: https://newsbit.nl/ethereum-reserves-op-beurzen-op-laagste-niveau-sinds-2016-wat-betekent-dit-voor-de-koers/
