Analysts predict that Ethereum will hit new highs as soon as the exchange thins on Ethereum reserves. The centralized exchange reportedly experienced a drop of around 27% in Ethereum reserves in just two days.
The number of Ethereum on the exchange appears to have gone down in the last two days. According to data from CryptoQuant there are currently only around 8.1 Million Ethereum left in the centralized exchange reserve.
This move was recently highlighted by one of the news shows stating that a roughly 10% drop in Ethereum supply has just taken place. This makes the reserve decrease on the exchange from around 11 Million to 10 Million in 24 Hours.
If this tempo continues, it is likely that most exchanges will run out of Ethereum reserves in the next 10 days. Currently, the stock has fallen another 20% which leads to appreciation in the event of running out of reserves.
Other data also shows that the majority of the exchange's Ethereum reserves have also fallen by around 42.5% since mid-May 2020. The results show that most exchanges could run out of Ethereum reserves within the next 48 hours.
Data from Glassnode shows that Ethereum reserves on a centralized exchange have not reached this low since July 2018. Currently, the amount of Ethereum stored by existing exchanges is only 7% of all Ethereum in circulation.
As a result, there is an analysis that there will be a significant price appreciation due to the scarcity. This analysis is based on what happened to Bitcoin where when demand beats supply, the price quadruples in 90 days.
Data from CryptoQuant shows that most of the Bitcoin reserves on most exchanges have fallen by around 21%. This depreciation occurred after the amount of Bitcoin reserves touched its highest amount in March 2020.
However, the appreciation for the amount of Ethereum flowing from the reserves of the majority of exchanges has outpaced Bitcoin's tempo. Bitcoin reserves on most exchanges have only fallen by around 4.5% since October 21, 2020 but the price has gone up by around 230%.
Bitcoin's move predicts that Ethereum could rise higher than Bitcoin as its supply dwindles. This sign was reinforced by The Block which saw many signs of appreciation, including the volume imbalance between buy and sell orders which reached 9%.
Sometimes I think that we are making the crpyto market complicated. Even if you just invest in BTC, ETH, BCH and functionable projects like AVAX, HIVE and WAX that can be enough for an investor for both blockchain products and profit from pumps in price ^^