Ethereum balance on exchanges recently hit a 3-month high which is a bearish sign. The balance on exchanges was on the decline for quite a while, but from December 2021, the pattern changed. Investors were readily buying during the rallies, and in the corrections, they are dumping quite a lot. The rise in exchange balance is a negative sign, and we might soon see further correction due to the same.
Ethereum balance on exchanges hits 3-month high
? #Ethereum $ETH Balance on Exchanges just reached a 3-month high of 14,715,388.749 ETH
Previous 3-month high of 14,714,748.847 ETH was observed on 21 February 2022
View metric:https://t.co/1dCpD2ey8E pic.twitter.com/TQHqaM3OOi
— glassnode alerts (@glassnodealerts) February 22, 2022
Reports from Glassnode show that the Ethereum balance on exchanges is on the rise, with a 700k increase in the last 3 months. The price action of Ethereum was also bearish during the time as we have seen a correction from nearly the all-time high to $2600. It is also one of the main reasons why we are seeing such an increase in supply.
Unless there is a major price increase and a lot of volume, we can expect that the number will keep on increasing. We have seen the same happen when the price of ETH hit a new ATH around November, and the supply declined from 15,750k ETH to 14,000K ETH in Dec.
ETH price action
At present, Ethereum is trading at $2,662 after bottoming out below $2,500 in the latest correction. It is difficult to say whether the price rise will continue here as Bitcoin will soon be approaching $40k. The way it reacts at those levels will also decide how altcoins move. A little negative momentum of Bitcoin could trigger further losses for ETH holders, and the balance on exchanges could continue to increase.
The sentiment in the market is also primarily towards sell with only a 28% buy. It is important to have a close eye on the support levels of $2,500 and resistance at $2,750. It could decide where the price moves in the short term.
For me, this looks like a good level to start accumulating. You could also look at lower levels near $2,500 but timing the exact bottom is a rather difficult thing to do. So, dollar-cost averaging is the way to go.
Do you that the rising Ethereum balance on exchanges will lead to further corrections? And if yes, what could be the bottom? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also, Read: El Salvador sees a 30% jump in tourism after making BTC legal tender.
