Ethereum exchange balances are touching 3-month highs. So is this a bear signal? Pioneer altcoin Ethereum had seen its balances on exchanges plummet by 2021. Investors had accumulated their crypto during all bull rallies instead of trying to dump it, which led to a decrease in supply on centralized exchanges. However, this trend is starting to reverse. For details cryptocoin.comPlease follow.
What’s going on in the pioneering altcoin project?
Ethereum exchange balances are touching 3-month highs. New on-chain reports have shown that Ethereum balances have increased once again. After hitting one-year lows in 2021, inflows began to pick up and balances soared to three-month highs. Data from Glassnode shows that this number has dropped more than 700,000 ETH from December lows. This measurement, which is inversely proportional to the price of the digital asset, continued in the new year. While their balances have dropped as the cryptocurrency has seen its price increase, the same balances as the current downtrend are growing. With Ethereum’s continued decline, investors are starting to sell their holdings to avoid losses. This resulted in huge inflows on the exchanges. The number of ETH remaining on the exchanges on February 21 reached 14,714,748,847.
Ethereum has reacted as expected to this new metric. When central balances fall, it indicates that investors are not ready to sell, thus increasing in value. However, when investors start moving their holdings to exchanges, it shows their willingness to sell, and large sales negatively affect the price of the digital asset. With the recent drop, Ethereum dropped below its 100-day simple moving average to trade at a six-month low. This means that investors are less willing to buy the digital asset at prices they have had over the past few months.
Sentiment also leaned heavily towards sales, with a 72% majority. The cryptocurrency is also showing strong selling sentiments on short, medium and long-term indicators, which means selling will continue. The next resistance point for the digital asset is listed at $2,748, but with the current trajectory, ETH is more likely to touch the $2,496 support level before it turns back to test this resistance. However, the crypto is not always predictable and ETH could start another recovery trend before it touches below $2,500.
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