Ethereum (ETH) remains nearly 50% below its all-time high of $4,878 (ATH), but its market capitalization reveals signs that the second-largest cryptocurrency could soon experience it.Supply shock” Because reserves are declining at major cryptocurrency exchanges like Binance.
Binance Ethereum Reserve Sees a Massive Fall
ETH has been steadily declining since April 14th, according to a recent encrypted quick take post by on-chain analyst Amr Taha. Taha said ETHER’s ETH reservations had dropped from just 4.2 million to 3.9 million by May 14th.
Such a sudden decline over a relatively short period of time has rekindled debates over the narrative of the shortage of ETH supply. If there are fewer coins held on the exchange, sales pressure tends to decrease. This reduction could lead to Higher price If demand remains constant as the available ETH is more limited.
Taha proposed two possible reasons behind the decline in Binance’s ETH reserves. First, he proposed that investors could transfer ETH to cold wallets or deploy it to distributed financial (DEFI) protocols for security or yield generation.
Second, institutional investors may be withdrawing large quantities of ETH for purposes such as over-the-counter (OTC) transactions, private investment, staking, and more. These activities reduce replacement reserves without necessarily putting sales pressure on them. Taha concluded:
A decrease of 300,000 ETH in Binance reserves suggests a significant change in investor behavior. While this could reduce immediate sales pressure, traders should closely observe this trend and its interaction with overall market demand.
Is ETH preparing a meeting?
Additional data points suggest that ETH may be preparing for large gatherings in the short to medium term. In another encrypted post, contributor BlitzzTrading analyzed the behavior of ETH whales.
In context, an ETH whale is a wallet address that normally holds 10,000 or more ETH. BlitzzTrading shares the following chart, indicating that the last major fix for ETH occurred after the whales made a profit when the price approached $4,000.
At the moment, these whales do not appear to be making any significant profits. However, BlitzzTrading advised to closely monitor this indicator. The surge in whale sales is because ETH could indicate a potential fix when it enters over-acquired territory.
Several analysts have set ambitious price targets for Ethereum in this market cycle. For example, recently Crypto analyst Ted Pillows It was predicted That ETH could reach $12,000 later this year.
Pillow too pointed That ETH appears to follow the Wyckoff accumulation pattern. This is a classic market structure that often precedes a significant price rise. He believes ETH can regain the $4,000 level by the third quarter of 2025 if the current momentum applies.
The basics of Ethereum have also been enhanced. Recent Network Finished The highly anticipated Pectra upgrade is expected to improve performance and security. At the time of pressing, ETH has dropped 2.2% to $2,541 over the past 24 hours.
Unsplash.com featured images, Cryptoquant and TradingView.com charts
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