Ethereum (ETH) has endured a turbulent August, with its price falling by approximately 23% over the past month. The situation reached a low point on August 5 when ETH dropped below $2,200, sparking panic among retail investors before its price rebounded.
Notably, this recovery can be partly attributed to substantial fund outflows from spot exchanges. Data from Cryptoquant shows that since August 5, exchanges have predominantly experienced withdrawals, with only a few days seeing minor inflows.
As of Tuesday, August 20, Ethereum’s exchange balance has reached a historic low, falling below 10% for the first time ever, surpassing Bitcoin. Currently, exchanges hold 18.78 million ETH, worth approximately $50 billion, down from 21.37 million ETH on the same day last year.
Key Takeaways:
- Exchange balance below 10%: A historic milestone indicating reduced sell pressure.
- $50 billion in ETH: Held on exchanges, down from previous years.
- Bullish sentiment: Analysts see potential for a price surge.
Leon Waidmann, the lead on-chain researcher at "Onchain Foundation," noted that the sharp decline in ETH held on exchanges could signal a potential price surge for the cryptocurrency.
"When demand for ETH picks up again, it’s likely that the price will shoot up!"
Metrics Pointing to a Potential Rebound
Analysts are closely monitoring other metrics that could signal a positive shift in Ethereum’s price trajectory:
- Taker Buy Sell Ratio: Turned positive, indicating renewed buying activity.
- Open Interest (OI): Reached $13 billion in June 2024 before correcting to $7 billion.
Burak Kesmeci from CryptoQuant emphasized:
"Current data shows that buyers in Ether are gradually regaining strength. However, time will tell whether this is a temporary rebound or the start of a strong rally led by the bulls."
Critical Price Levels to Watch
Analyst Scient identified a crucial support and resistance zone between $2,900 and $3,000:
- Bullish Scenario: A breakout above $3,000 could push ETH toward $3,300–$3,400.
- Bearish Risk: Failure to hold support may lead to further declines.
Meanwhile, analyst Cryptobullet remains optimistic, suggesting Ethereum may consolidate before rallying toward $10,000 in the next market cycle.
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FAQs
Q: Why is Ethereum’s exchange balance significant?
A: Lower exchange balances reduce sell pressure, potentially leading to price increases as demand rises.
Q: What does the Taker Buy Sell Ratio indicate?
A: A positive ratio suggests more buyers than sellers, a bullish signal.
Q: When could Ethereum reach $10,000?
A: Some analysts predict this milestone in the next market cycle, though timing depends on broader market conditions.
ETH was trading at $2,608 at press time, reflecting a 1.13% surge over the past 24 hours.
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