Ethereum Targets US$2,500 Amidst Supply Decline on Exchanges

Introduction:

In a significant market development, Ethereum has witnessed a substantial reduction of 240,000 tokens within the past day, marking a noteworthy shift in market dynamics. This decline in Ethereum’s supply on exchange platforms has reached an all-time low, creating a compelling bullish narrative for the ETH price. Technical indicators suggest the potential for ETH price to reach US$2,500. Ethereum, a decentralized blockchain platform, is known for its smart contract functionality and serves as the foundation for various decentralized applications (DApps).

Ethereum’s Exchange Supply Hits Historic Low:

The supply of Ethereum on exchanges, measured as a percentage of the total supply, currently stands at 8.06%, the lowest level since the cryptocurrency’s inception. Santiment’s data reveals a significant drop from around 11% at the beginning of 2023. This decline in exchange supply traditionally eases selling pressure on the asset, setting the stage for potential price gains.

Surge in Network Growth and Volume:

Accompanying the reduction in exchange supply, Ethereum’s network has experienced notable growth and increased volume. These on-chain metrics provide robust support for the ongoing rally in ETH prices, reflecting a healthy and resilient market environment.

Technical Indicators Signal US$2,500 Target:

Ethereum is currently in an upward trend that initiated on October 12, 2023. The price has consistently formed higher highs and higher lows, maintaining levels above US$2,100 throughout December. Technical analysis indicates a potential price target of US$2,500, with the 50% Fibonacci retracement level at US$2,232.89 serving as a critical resistance point. Caution is advised, as a daily candlestick close below US$2,100 could challenge the bullish thesis for Ethereum’s price.

Correlation with Bitcoin and Santiment’s Analysis:

Ethereum’s recent price movements closely align with Bitcoin, boasting a robust three-month correlation of 0.97. Analysts at Santiment pinpoint a pivotal catalyst for ETH price gains – a historic dip in Ethereum’s supply on exchanges, effectively reducing selling pressure and supporting the ongoing bullish cycle.

Conclusion:

In summary, Ethereum is strategically positioned for potential upward momentum, with its supply on exchanges hitting unprecedented lows. Technical indicators signaling a US$2,500 target, coupled with increased network growth and volume, underscore Ethereum’s resilience and potential for further gains. Traders and investors are attentively monitoring these developments, recognizing the significance of Ethereum’s current market conditions.