- Ethereum’s exchange reserve increased by 163K ETH in the past five days.
- Ethereum has added over 4 million new holders in the past three months.
- Ethereum could bounce near $2,400 support after moving average resistance.
Ethereum (ETH) is down over 2% on Tuesday following an indication of selling pressure due to an uptick in its exchange reserve. However, other on-chain metrics indicate mixed investor sentiment amid ETH’s price consolidation.
Daily digest market movers: ETH rising exchange reserve, new holders uptrend
Since August 29, Ethereum’s exchange reserve has switched from a downtrend to an uptrend. Exchange reserve is the total amount of a cryptocurrency held in an exchange. An increase in an asset’s exchange reserve indicates higher selling pressure and vice versa for a decrease.
According to CryptoQuant’s data, Ethereum’s exchange reserve increased by about 163K ETH, worth about $407.5 million, in the past five days. As a result, ETH may likely see short-term selling pressure until its exchange reserve starts declining again.
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ETH Exchange Reserve
Meanwhile, despite Ethereum’s price lag, its total number of holders has been in an uptrend, adding over 4 million new non-empty wallets in the past three months, per Santiment data. This takes the total number of ETH holders to nearly 127 million, meaning new market participants may be betting on an ETH price increase in the long term. In comparison, BTC’s total holders declined by 50K during the same period.
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ETH vs BTC Total Holders
While the Ethereum holders’ count is growing, whale activity within the network has declined considerably from its peak during the market rally in early March. According to Santiment’s data, Ethereum’s whale transaction count declined from over 115K whale transactions between March 13-19 to 31.8K between August 21 and 27 — only about one-quarter of the March whale transaction count.
The decline is evidenced by the reduced volatility of ETH in the past few months, with the only exception being the market surge on May 20 and the crash on August 5. Whale activity often peaks when volatility increases, noted Santiment analysts.
ETH technical analysis: Ethereum could bounce around key support level
Ethereum is trading around $2,450 on Tuesday, down 2.5% on the day. In the past 24 hours, ETH has seen liquidations worth $26.94 million, with long and short liquidations accounting for $22.13 million and $4.81 million, respectively.
On the 4-hour chart, ETH’s upward move was restricted by a convergence of the 200-day, 100-day and 50-day Simple Moving Averages (SMA) in the European trading session. As a result, ETH is attempting a move downward within a key rectangle with support and resistance levels at $2,400 and $2,817, resepectively.
ETH/USDT 4-hour chart
ETH may bounce around the $2,400 support level and stage another move up, but only after potentially liquidating positions worth $40.8 million at the $2,424 level, per Coinglass data.
A move outside the key rectangle will likely determine ETH’s next price trend. A breach of the $2,400 support level could send ETH toward $2,111. A successful breakout above the $2,817 level and SMA resistance will see ETH rally toward $3,237.
The Relative Strength Index (RSI) and Stochastic Oscillator’s (Stoch) %K line are trending below their midlines, indicating a short-term bearish outlook.
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
