Ethereum's Exchange Supply Drops 17% as Investors Accumulate

Ethereum has faced a challenging period over the past month and a half, with its price approaching a 17-month low of $1,802. Despite this downward trend, which nearly pushed ETH into a bear market, key investors have maintained a positive outlook. As Ethereum nears these critical levels, many market participants anticipate a potential price rebound.

Ethereum’s supply on exchanges has decreased to a six-month low, indicating that investors are increasingly holding their assets off the market. This reduction in exchange supply is often viewed as a bullish indicator, suggesting that long-term holders (LTHs) are accumulating more ETH at these lower price points, anticipating future price increases. These investors are reluctant to sell, demonstrating strong confidence in Ethereum’s long-term value. The decrease in exchange balances also points to reduced short-term trading activity, implying that many investors are waiting for the price to recover before making any moves.

Over the past month, Ethereum’s Liveliness indicator has declined, signaling that selling pressure is weakening. Liveliness measures the activity of long-term holders, and a decline generally indicates accumulation rather than selling. This drop reflects the growing sentiment among Ethereum’s long-term investors, who are increasing their holdings and expecting the price to recover in the future. The decline in Liveliness suggests that many are confident in Ethereum’s fundamentals and are less concerned about short-term fluctuations.

This accumulation phase suggests that Ethereum’s market sentiment may be shifting. The confidence of LTHs, who hold significant influence over the asset’s price, could lead to strong upward momentum once market conditions improve. Ethereum is currently trading at $1,802, just below the resistance level of $1,862. The price has been stuck under this barrier for six weeks, continuing the downtrend that has defined much of the recent price action. However, if Ethereum can break above $1,862, it could signal the end of the downtrend and the start of a price recovery.

Given the current market sentiment and accumulation by key holders, it is possible that Ethereum will continue to gain upward momentum. If Ethereum successfully breaks through the $1,862 resistance, it could move toward the $2,000 mark, regaining some of the losses from the previous weeks. On the other hand, if bearish sentiment intensifies, Ethereum’s price may dip further toward its 17-month low of $1,745. Failure to secure support at this level could lead to even greater losses, extending the recent downtrend and leaving many investors exposed to a prolonged bearish market.