Could Ethereum Price Reach $4,000 As Exchange Supple Dwindles?
After consolidating around $1,950 over the weekend, the price of Ethereum broke $2,000 on Monday, November 20th. On-chain analysis shows how US-based corporate investors reacted to Blackrock's latest ETH filing.
Ethereum price recovered $2,000 on Monday. On-chain data shows that corporate investors have joined the race to collect ETH following the filing of Blackrock's Spot ETH ETF.
Ethereum exchange supply drops to 5-year low
The price of Ethereum has moved sideways in the past week. But a closer look at recent on-chain data trends reveals that ETH investors have started making strategic bullish moves since the BlackRock Spot ETF filed.
CryptoQuant's Exchange Reserves charts show that investors began shifting ETH coins into long-term storage shortly after BlackRock went public with the Spot ETH ETF on November 15.
The chart below shows the number of Ethereum coins traded on crypto exchanges in 2018. November 15 stood at 14.5 million. But investors have since exchanged 152,583 ETH, bringing the total market supply to a 5-year low of $14.3 million.
Exchange Reserves are an on-chain metric that tracks the total supply of currency stored in ETH wallets hosted by an exchange. Typically, a decrease in the currency supply indicates a decrease in the number of coins readily available for trading on exchanges and trading platforms.
With the price of Ethereum currently hovering around $2,000, 152,583 ETH were removed from exchanges, worth approximately $305 million.
In particular, July 2018 was the last time ETH market supply was low. Crypto wallets and sophisticated high net worth investors are known to prefer cold wallet storage. If Blackrock's ETF filing attracts more whales to buy ETH, the exchange's supply could decrease further.
Notably, ETH price dropped to 2018 lows while it rebounded to an all-time high of $4,891 in 2021.
Therefore, a rapid decline in Ethereum market supply will put pressure on the ETH price in the $4,000 market if ETM and Bitcoin (BTC) spot ETF applications are approved by the Securities and Exchange Commission (SEC).
Disclaimer
In accordance with Trust Project guidelines, this price analysis article is for informational purposes only and should not be construed as financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.
