Ethereum
Bitcoin and Ethereum on Exchanges Fall to New Lows, What Supply Squeeze Would Mean for Market – TradingView News
Recent data shows that the supply of Bitcoin (BTC) and Ethereum (ETH) on exchanges has decreased significantly. This means that the largest crypto tokens by market capitalization could be well-prepared for significant bullish moves, with an impending supply squeeze.
Bitcoin and Ethereum supply drops to new lows
BTC ECHO analyst Leon Waidmann shared data from Glassnode, which showed that exchange balances for Bitcoin and Ethereum are at their lowest levels in years. Bitcoin’s supply on exchanges fell to 11.6%, while Ethereum’s supply fell to 10.6%. This suggests that crypto whales have been accumulating these crypto tokens and placing them in self-custody.
Waidmann stressed the importance of this development, noting that a supply squeeze was imminent. This supply squeeze could help drive up Bitcoin and Ethereum prices as most investors are currently looking to accumulate rather than dump their holdings. Along the same lines, the analyst urged his followers to “prepare for the next big move.”
Interestingly, crypto analyst Ali Martinez suggested that this move could have started after the approval of the Spot Ethereum ETFs. He said in a post on
Once finally launched, these Spot Ethereum ETFs should kick off the bull run. As such, it is no surprise that these crypto whales are looking to position themselves ahead of this development. Bloomberg analyst Eric Balchunas predicts that these funds will likely begin trading by July.
However, research firm Kaiko warned that these funds may not instantly send Ethereum’s price to new all-time highs (ATH). The second-largest crypto token will likely face significant selling pressure thanks to potential outflows from Grayscale’s Spot Ethereum ETF. This is based on the $6.5 billion outflows recorded by Grayscale’s Spot Bitcoin ETF in its first month of trading, which resulted in a significant decline in the price of Bitcoin.
ETH Could Hit New All-Time High in Record Time
Crypto analyst Michael Nadeau suggested that Ethereum could yet reach a new ATH once Spot Ethereum ETFs start trading faster than Bitcoin following the launch of Spot Bitcoin ETFs. He noted that Ethereum does not have the same level of “structured selling” as Bitcoin, as ETH validators do not need to sell their holdings to offset operating costs, unlike Bitcoin miners.
He also pointed out that 38% of Ethereum’s supply is locked on-chain and claimed that “ETH is more reflexive than BTC.” He further explained that this reflexivity is evident in the way Ethereum conducts on-chain activity, resulting in more ETH being burned. Given this, Grayscale’s releases may not impact Ethereum’s price the way they did Bitcoin’s price, which could cause the second-largest crypto token to hit a new ATH in no time at all.