Ethereum's Exchange Withdrawals Plummet 40% as Selling Pressure Surges 10%

Ethereum's inability to establish a strong foothold above $2,000 has dampened investor sentiment, leading many traders to keep their assets liquid in anticipation of a potential selloff. This cautious approach is evident in the significant decline in ETH withdrawals from exchanges, which have plummeted to a seven-month low. According to data from Glassnode, ETH’s exchange withdrawal transactions totaled 59,755 coins on a recent Tuesday, marking the lowest single-day count since August 31. This trend suggests that fewer investors are moving their holdings to private wallets or cold storage, indicating a lack of long-term holding plans. Instead, investors are opting to keep their ETH on exchanges, a move that signals readiness to sell.

Concurrently, ETH deposits have surged by 10% since the beginning of March, confirming the increasing selling pressure in the market. When an asset’s exchange deposits spike, it often means more investors are moving their holdings onto exchanges, typically in preparation to sell. As bearish sentiment grows, these coins are sold for profit, exerting further downward pressure on ETH’s price. At the time of reporting, ETH is trading at $2,073, reflecting a 3% gain over the past week as part of the broader market recovery. On the daily chart, the leading altcoin follows an ascending trendline, signaling sustained price growth. If bullish momentum intensifies and exchange withdrawals increase while deposits slow, ETH could maintain this trend and reclaim the $2,148 level. However, if exchange activity remains unchanged and selling pressure rises, ETH risks breaking below the ascending trendline, potentially falling to $1,759.

This analysis underscores the delicate balance between bullish and bearish forces in the Ethereum market. The recent decline in withdrawals and surge in deposits indicate a shift towards selling, which could pressure prices downward. However, the potential for a rebound remains, contingent on a reversal in exchange activity and a resurgence in bullish sentiment. Investors and traders will be closely monitoring these dynamics as they navigate the volatile cryptocurrency landscape.