Over the past quarter, Ethereum bears have dominated the market. However, recent data indicates a shift in sentiment as ETH is being withdrawn from exchanges, reflecting increasing demand at lower price levels.
Recent reports from Glassnode have shown a steady outflow of Ethereum from exchanges. Particularly noteworthy is the decline in ETH reserves on exchanges, reaching levels last recorded in 2016. This reduction in exchange reserves could potentially set the stage for a significant price rally, similar to what was witnessed in 2017.
An examination of Ethereum’s performance in 2016 reveals a turbulent period. After reaching a peak price of $18.36 in June, ETH experienced a sharp decline, dropping below $12 by September and reaching a low of $7.14 by December before embarking on a remarkable rally in 2017.
If Ethereum follows a similar trajectory in 2024, it could signal a strong rally in 2025. The recent outflow of ETH from exchanges underscores the strong demand for the cryptocurrency at discounted prices, with the pace of withdrawals on the rise.
The Potential Impact of Ethereum’s Rising Demand
Data on Ethereum addresses indicates a higher number of outflow transactions compared to inflows. Currently, there are around 204,000 active sending addresses versus nearly 188,000 receiving addresses.
Recent trends in active addresses reveal an interesting development — a rise in active receiving addresses alongside a decrease in active sending addresses. This shift in dynamics may be attributed to ETH’s current price level, potentially hinting at a change in supply-demand equilibrium.
Following a recent downturn, ETH found support around the $2,333 mark, indicating growing anticipation of a market pivot around this price level, especially as bearish pressure eases.
Despite these promising signs, the 1-day chart suggests that bullish momentum is still lacking, with the RSI signaling a prevailing bearish trend that could extend towards August’s price lows.