Ether Balance On Exchanges Hit Record Lows, Can It Trigger a Major Rebound?
Ethereum (ETH) continued to trade subdued for most of Thursday, extending its two-week-long price range amid market indecision.
Notably, since experiencing a sharp drop on February 3 and subsequently recovering, the second-largest cryptocurrency has been confined within a tight channel, with price oscillating between the $2,800 resistance level and the $2,500 support zone.
However, despite this weakness, something is brewing under the hood, an underlying shift that could trigger a major breakout for ETH.
One of the most notable developments in the Ethereum market is the sharp decline in the amount of ETH held on exchanges. According to crypto analytics firm Santiment, currently, only 6.38% of the total ETH supply remains on centralized trading platforms, marking the lowest level since the cryptocurrencys inception.
From a long-term perspective, ETH continues to move off of exchanges and into cold wallets at a shocking paceMeanwhile, the community has been showing some renewed interest in cryptos 2 market cap asset here in February. The firm tweeted Tuesday.
Notably, approximately 4.36 million ETH has been withdrawn since early 2024, reducing selling pressure and setting the stage for a potential rally if demand increases.
Another bullish factor is the decline in Ethereum transaction fees. On Wednesday, Santiment highlighted that the average ETH transaction fee now sits at $0.41, significantly lower than the $15.21 high seen in the past two years. Lower fees indicate reduced network congestion, making Ethereum more accessible to new investors and developers and, in turn, strengthening ETHs value.
Beyond exchange balances and fees, optimism surrounding Ethereums upcoming Pectra hard fork on April 8 is also surging. On Tuesday, analysts at QCP Capital noted that Ethereum upgrades often follow a buy the rumor, sell the news pattern. They highlighted how ETHs price doubled before the 2022 Merger and surged 30% after Shanghai in 2023, suggesting that if history repeats, a similar upswing could unfold post-Pectra.
Some analysts argue that Solana (SOL), once a top Ethereum competitor, is losing credibility due to a series of meme coin scandals, including LIBRA, which could drive capital back to ETH.
Solanas narrative as the best chain for retail adoption has shifted to one of fraud and insider trading, The hate on Ethereum for UX, lack of interop, and social layer dichotomies has been progressing steadily in a stronger way than ever. Tides are shifting. Watch SOLETH as a barometer. Rollup Ventures co-founder Andy said on Tuesday.
Ethereum was trading at $2,730.37 at press time, up 0.39% in the past 24 hours.
Read more: https://zycrypto.com/ether-balance-on-exchanges-hit-record-lows-can-it-trigger-a-major-rebound/
Text source: ZyCrypto
