Ethereum recently cleared the $2,000 price level again in the past 24 hours, as filings of Spot Ethereum ETFs in the US start to pile up. New on-chain data has shown a clearer sentiment among ETH investors, and it looks like many are getting ready for the long haul.
Data shows that the amount of Ethereum held on exchanges has dropped since the middle of last week to the lowest levels since 2018. That means fewer people are selling their Ethereum, and more are holding onto it or staking it.
Ethereum Exchange Supply Plummeting
Although Ethereum is still down by 2.57% in the past seven days, the cryptocurrency is now trading above $2,000 after breaking the barrier on Monday, November 21. The recent surge would be the third time Ethereum crossed over the price level this month, as it’s still looking to maintain a sustained price increase.
The recent spikes can be attributed to applications of Ethereum Spot ETFs piling up in front of the US SEC. BlackRock, in particular, joined the spot Ethereum ETF race on November 15th, igniting a price spike that pushed ETH past the $2,000 mark for the second time this month.
It would appear that investors reacted to BlackRock’s ETH filing with the same sentiment they had in response to the investment company’s spot Bitcoin filing. CryptoQuant’s Exchange Reserves metric indicates that investor sentiment started to change around this period, as investors started to pull their assets off of exchanges into cold storage immediately after the news.
According to the metric, the number of ETH deposited across crypto exchanges amounted to 14.5 million as of November 15. However, this figure dropped by 152,583 ETH in the days after to reach 14.3 million on November 20th.
IntoTheBlock’s exchange netflow reveals a similar sentiment. The netflow calculates the number of tokens entering exchanges minus tokens leaving exchanges. According to the metric, exchanges have had around 228,450 ETH more in outflows than inflows since November 15.
What To Expect For ETH Price Action In The Coming Months
Dropping exchange reserves reduces the amount of ETH available for trading, thereby increasing scarcity. The data from both Cryptoquant and IntoTheBlock indicates Ethereum might be gearing up for a price spike fueled by increasing scarcity.
Ethereum is trading at $2,013 at the time of writing. We’ve already seen the crypto increase by 67% from $1,200 at the beginning of the year, and many analysts expect this trend to continue if supply tightens. According to crypto analyst Tony The Bull, Ethereum could cross $10,000 very soon if a bullish scenario plays out.