On-chain data shows exchanges have recently observed a large amount of Ethereum exit their wallets, a sign that could be bullish for ETH’s value.
Ethereum Exchange Reserve Has Seen A Plunge Recently
As explained by analyst Ali Martinez in a new on X, the ETH investors have made net outflows from exchanges recently. The on-chain indicator of relevance here is the “Exchange Reserve,” which keeps track of the total amount of Ethereum sitting on the wallets associated with all centralized exchanges.
When the value of this metric goes up, investors will make net inflows into these platforms right now. As one of the main reasons holders deposit their coins in exchanges is for selling-related purposes, this trend can have bearish implications for the asset’s price.
On the other hand, the indicator registering a decline suggests a net amount of ETH is currently exiting the exchanges. Such a trend can indicate that the investors are accumulating, which can naturally prove to be bullish for the cryptocurrency.
Now, here is a chart that shows the trend in the Ethereum Exchange Reserve over the last few weeks:
The value of the metric appears toa have faced a sharp correction in recent days | Source:
As displayed in the above graph, the Ethereum Exchange Reserve has registered a huge drop during the last few days, which implies that investors have made large net withdrawals.
The holders have taken out more than 300,000 ETH from these platforms during the past week, which is worth almost $754 million at the current exchange rate.
Given the massive scale involved here, it’s likely that the whale entities were behind the outflows. Also, considering that the withdrawals have come after ETH’s stumble from its $2,700 high earlier in the month, these humongous investors may have made them buy at the lows.
Naturally, if this is true, Ethereum could benefit from a rebound from this plunge in the Exchange Reserve. The surge may also have begun, as ETH has now recovered above the $2,500 mark.
In some other news, as market intelligence platform IntoTheBlock has pointed out in an X , the Ethereum Market Value to Realized Value (MVRV) Ratio is sitting at 1.2 right now.
The trend in the ETH MVRV Ratio over the last few years | Source:
The MVRV Ratio tells us how the value that Ethereum investors are currently holding compares against the amount that they initially put into the cryptocurrency.
The latest value of 1.2 suggests the average ETH holder is currently holding a profit. From the chart, it’s apparent that the asset has historically encountered tops when the MVRV Ratio has been at notably higher values, so it’s possible that the current profitability isn’t high enough for ETH to top out.
ETH Price
At the time of writing, Ethereum is trading at around $2,500, down 6% over the last seven days.
The price of the coin appears to have plunged over the last few days | Source:
Featured image from Dall-E, CryptoQuant.com, charts from TradingView.com
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
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Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
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