The market dynamics of Ethereum are now experiencing intense scrutiny while its price keeps on declining. As per a CryptoQuant analyst, this slump in Ethereum’s price reportedly raises concerns, with the former spike in exchange reserves of Ethereum apart from the recent death cross indicating a further continuation of the bearish trend.
Ethereum Exchange Reserve Metric Indicates a Potential Offloading of $ETH Tokens
The analyst going by “ShayanBTC” recently shared an analysis report on the official web portal of CryptoQuant. The analyst noted that the traders as well as analysts are specifically taking into account the Ethereum Exchange Reserve metric. It is a chief indicator for tracking the $ETH amount that the exchange wallets hold. People often utilize the respective metric as a supply proxy.
This is because the exchange-held coins can be conveniently sold, impacting the price trends and market sentiment. Between June and August, the Ethereum Reserve metric displayed a steady upward trend, pointing toward a distribution phase. During the respective phase, an increasing $ETH amount moved to exchanges, highlighting the inclination of holders to offload.
The respective distribution phase particularly contributed to the above-mentioned bearish trend to a great extent. The recent months have seen the domination of this bearish trend on the price action of Ethereum. The situation has reportedly become more apprehensive with a “death cross” on the price chart of Ethereum. A death cross is a technical pattern that takes place when a short-term moving average slumps under a long-term moving average.
Recent Ethereum Death Cross Highlights an Extension of Bearish Phase
Particularly, the 100-day moving average of Ethereum has reportedly crossed below the 200-day moving average. This indication is typically linked with a continuation of the bearish trend. After the respective death cross, a sharp spike started taking place in the Ethereum Reserve metric. This repeated increase in Ethereum’s exchange reserves points toward a potential distribution phase for another time.
While more Ethereum is moving toward the exchanges, the likelihood is increasing for an upsurge in selling pressure. This could pave the way for additional price decline. The elevating exchange reserves normally suggest the intention of the investors to soon offload holdings. This minimizes the demand while intensifying the downward trend.
Source: https://blockchainreporter.net/ethereum-faces-bearish-outlook-as-exchange-reserves-rise-and-death-cross-appears/