Is Ethereum Headed For Trouble? Analyst Warns Of Surging Exchange Reserves
September 03 2024 - 4:00AM
NEWSBTC
Ethereum, the second-largest cryptocurrency by market
capitalization, has been under significant pressure in recent
weeks. As its price continues to fluctuate, analysts have been
observing its market signals to determine whether the current phase
is one of accumulation or distribution. According to a recent
analysis by CryptoQuant analyst Shayan, the Ethereum exchange
reserve metric, which tracks the amount of ETH held in exchange
wallets, is providing insights into this question. Related Reading:
Is Ethereum’s Price Under Pressure? Here Is What Futures Data
Signals What Does The Ethereum Exchange Reserve Currently Signals?
Shayan disclosed in the analysis shared in a post on the
CryptoQuant QuickTake platform that the Ethereum exchange reserve
metric has shown a notable upward trend between June and August,
indicating a distribution phase that has contributed to the ongoing
bearish trend. This metric is particularly noteworthy given that
coins held on exchanges are often considered ready for sale, which
can lead to increased selling pressure. According to Shayan, the
recent “death cross” on Ethereum’s price chart, where the 100-day
moving average crossed below the 200-day moving average, has raised
further concerns. Following this technical signal, the exchange
reserve metric has risen sharply, suggesting that another
distribution phase may be unfolding. The analyst noted that this
increase in reserves on exchanges could point to a potential
decrease in demand for Ethereum, which might lead to further price
declines. However, Shayan noted that the state of the futures
market, a critical factor in price determination, must also be
analyzed before making “definitive conclusions.” Exchange Reserves
Signal New Distribution Phase Amidst Death Cross Concerns “Ethereum
reserves on exchanges continue to grow, the likelihood of a
decrease in demand—and consequently, a further price decline—also
increases.” – By @ShayanBTC7 Link 👇https://t.co/HKaeDBsss3
pic.twitter.com/K6mMDmtnBH — CryptoQuant.com (@cryptoquant_com)
September 2, 2024 Ethereum’s Price Action and Market Sentiment
Despite the concerning signals from the exchange reserve metric,
Ethereum has managed to stage a modest recovery over the past day.
The cryptocurrency has seen a 2.2% increase, bringing its current
trading price to $2,515 at the time of writing. However, this
uptick does little to offset the 7% decline Ethereum has
experienced over the past week. Renowned crypto analyst CrediBull,
commenting on Ethereum’s recent price action, emphasized that the
situation is still evolving. He noted: Nothing has really changed
on ETH here. We went a bit lower, but OI has simply decreased even
more, funding is negative, and we are simply back at our local
lows. CrediBull suggests that Ethereum might sweep the lows
into local demand before forming a deviation and potentially moving
higher. Related Reading: Ethereum’s Breakout Moment: Is a $7,500
Target Achievable? Experts Weigh In He also warned against
overreacting to short-term volatility, stressing the importance of
managing risk and sticking to plan if the fundamental market
conditions haven’t significantly changed. Featured image created
with DALL-E, Chart from TradingView
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