Ethereum
Bitcoin and Ethereum Exchange Balances at Record Highs – What Now?
- CryptoQuant data shows that Bitcoin and Ethereum exchange balances are falling.
- Technical analysis indicates significant price movements for both cryptocurrencies if key resistance levels are broken.
Bitcoin [BTC] was trading at just under $70,000 at press time, reflecting a moderate 2% rise over the past 24 hours, although it remains below its March high of over $73,000.
This continued growth of the asset is part of a larger narrative that highlights the complexity of crypto market movements.
Conversely, Ethereum [ETH] has shown remarkable stability, maintaining a position above $3,800. This stability comes despite a slight decline of 2.5% over the past day, stabilizing with a minimum increase of 0.7% today.
Ethereum’s price stability indicates sustained interest in the asset amid fluctuating market conditions.
Changes in the Bitcoin and Ethereum market
Recent analysis from Leon Waidmann of BTC-ECHO revealed that Bitcoin and Ethereum both experienced their lowest exchange balance levels in years.
Specifically, Bitcoin’s presence on exchanges was reduced to 11.6% while Ethereum’s presence dropped to 10.6%.
Source: Léon Waidmann on
This trend suggests a significant movement of these assets off exchanges and potentially indicates a strategy among investors to hold onto their coins for longer periods of time.
Source: CryptoQuant
CryptoQuant Review by AMBCrypto data further revealed a substantial outflow of these cryptocurrencies from exchanges.
More than $5 million worth of Bitcoin and more than $1 billion worth of Ethereum have withdrawn from exchanges since the beginning of May.
The move is notable as it follows the approval of Ethereum spot ETFs in the United States, hinting at a possible supply crunch on the horizon.
Source: CryptoQuant
The reduction in foreign exchange reserves means that fewer coins are now available for immediate exchange, suggesting a potential increase in prices due to scarcity.
Waidmann predicts this will lead to a supply squeeze, urging investors to prepare for significant market moves, noting:
“The whales continue to accumulate. Compression of incoming supply. Get ready for the next big move.
Market dynamics and technical analysis
However, Glassnode data presents a contrasting view, showing an increase in circulating supply for both cryptocurrencies, suggesting that despite the reduction in trading availability, overall market supply remains high.
Source: Glasssnode
This scenario paves the way for possible price corrections if demand fails to keep pace with growing supply. However, current market indicators suggest that demand is holding up, as there has been no notable drop in prices despite the increasing supply.
Source: Glasssnode
At the same time, there is a decline in the number of new addresses for Bitcoin and Ethereum, which could indicate a slowdown in interest from new investors, which could impact future demand.
Source: Glasssnode
Meanwhile, technical analysis of Bitcoin and Ethereum charts reveals potentially intriguing performances on the horizon.
Focusing on Bitcoin’s daily chart, it illustrates a trend in which the cryptocurrency has broken lower support levels, recently reversing to enter a major supply zone.
Source: TradingView
This movement generally signals a continuation of the downtrend. However, if Bitcoin breaks above the $72,000 mark, breaking the previous lower high and reversing the bearish pattern, it could suggest a reversal of an uptrend.
AMBCrypto, citing an analyst from XBTManager on CryptoQuant, reported that Bitcoin is poised for a notable rise. The analyst suggests,
“Bitcoin is strengthening for the next rise. When it gathers enough strength, a sharp rise appears imminent. It seems likely that increases similar to those seen in the third and fourth quarters will continue.
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A similar trend appears on the daily chart of Ethereum. Ethereum recently entered a major supply zone, suggesting an impending sell-off.
Nonetheless, if Ethereum breaks the $4,000 threshold, surpassing the recent lower high and reversing the current sell signal, it could pave the way for an upward move.
Source: TradingView