Ethereum
Bitcoin and Ethereum on Exchanges Fall to New Lows, What Supply Squeeze Would Mean for the Market
Recent data shows that the supply of Bitcoin (BTC) and Ethereum (ETH) on exchanges has declined significantly. It means that biggest crypto tokens by market cap could be well prepared for significant upward moves, with a supply squeeze imminent.
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 accumulated these crypto tokens and placed 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 the prices of Bitcoin and Ethereum since most investors seem to be accumulating at the moment rather than getting rid of their assets. Along the same lines, the analyst urged his followers to “prepare for the next big move.”
Interesting way, Ali Martinez, crypto analyst suggested that this movement could have started after the Approval of Spot Ethereum ETFs. He said in an X (formerly Twitter) job that nearly 777,000 ETH ($3 billion) has been withdrawn from crypto exchanges since the Securities and Exchange Commission (SEC) approved these funds.
Once finally launched, these Spot Ethereum ETFs are expected to launch the the bull rushes past. As such, it is no surprise that these crypto whales are looking to position themselves ahead of this development. Eric Balchunas, analyst at Bloomberg predicts that these funds will likely begin trading by July.
However, research firm Kaiko has warned that these funds might not instantly send the price of Ethereum 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 figure is based on cash outflows of $6.5 billion Grayscale Spot Bitcoin ETF recorded during its first month of trading, which led to a significant drop in the price of Bitcoin.
ETH Could Hit New All-Time High in Record Time
Michael Nadeau, crypto analyst suggested that Ethereum could still reach a new ATH once Spot Ethereum ETFs start trading faster than Bitcoin following the launch of the Spotting Bitcoin ETFs. He noted that Ethereum does not have the same number of “structured sales” as Bitcoin, because ETH validators do not need to sell their holdings to compensate. operating costsunlike 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 how Ethereum conducts on-chain activity, which leads to more ETH 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.
