Ethereum is currently experiencing a surge in outflows from exchanges, with $500 million worth of ETH withdrawn this week alone. This adds to a total of over $1.2 billion in outflows in the last month, according to data from on-chain analytics company IntoTheBlock. This comes as Ethereum has been on an upward trajectory, fueled by bullish sentiment and dropping exchange reserves, indicating a potential price spike driven by scarcity.
Surge In Ethereum Outflow From Exchanges
Following the approval of spot Bitcoin exchange-traded funds in the United States, Ethereum has seen a significant price growth, with on-chain data reflecting strong bullish sentiment and increased outflows from exchanges. Last week, amid the approval of spot Bitcoin exchange-traded funds, IntoTheBlock reported exacerbated outflows, contributing to a larger portion of the $1.2 billion ETH withdrawn from exchanges in the past month.
$500M in $ETH was withdrawn from CEXs this week, adding to a total of over $1.2B in outflows in the last month pic.twitter.com/e8NFOGtrDV
— IntoTheBlock (@intotheblock) February 2, 2024
Ethereum currently trading at $2,308 on the daily chart: TradingView.com
CryptoQuant reported that 1.622 million ETH were withdrawn from exchanges last week, indicating a consistent decrease in exchange reserves over the past year. The statistics show the total quantity of Ethereum deposited with cryptocurrency exchanges has reached its lowest level ever, creating greater scarcity of ETH for trading.
What Does This Mean For ETH Price?
Dropping exchange reserves reduce the availability of ETH for trading, leading to increased scarcity. This scarcity, coupled with consistent bullish sentiment and price growth, indicates that Ethereum may be gearing up for a significant price spike driven by these factors.
According to the current price action, it seems that Ethereum has established a support level slightly above $2,280 and is now seeking a strong increase above this price point. This echoes a previous price movement in 2021 that eventually led to ETH reaching its all-time high of $4,878. All signs point to a potential bullish trajectory for Ethereum in the near future.
$ETH is apparently repeating the previous chart configuration.🚀#Ethereum #ETH #Altseason pic.twitter.com/AA1PJiN24h
— Trader Tardigrade (@TATrader_Alan) February 3, 2024
Featured image from Adobe Stock, chart from TradingView
