The post Ethereum’s Bullish Breakout Looms As Exchange Reserve Hits 5-Year Low! Where’s ETH Price Heading Next? appeared first on Coinpedia Fintech News
After the market downturn, Bitcoin experienced a decline of over 10% from its crucial $28K mark, with Ethereum reflecting a similar pattern. Presently, despite being aware of the upcoming launch of Ethereum futures ETF in October, both investors and large-scale holders are actively liquidating their holdings. Yet, a promising metric remains that is bringing confidence, suggesting Ethereum could be on the brink of a breakout.
Bullish Signal For Ethereum As Exchange Reserve Touches 5-Year Low
As per Coinglass, traders are consistently offloading their positions, even during slight upticks. In just the past two days, positions worth over $10 million were liquidated, with bullish traders accounting for approximately $6.5 million of that amount. This indicates that Ethereum could encounter significant sell-offs if it tries to climb from its current level, potentially keeping the price confined within a specific range.
However, there’s a bullish metric that is holding promises of a breakout in the ETH price. Data from CryptoQuant reveals that the Exchange Reserve metric has been declining steeply this year, now reaching its 5-year low of 148 million ETH. This level was previously reached on 6 August 2018, when the Ethereum price was trading around $400.
The graph above illustrates that Ethereum’s exchange reserve experienced a decrease in 2021, but the decline became more pronounced in 2022. The metric in this context is the “all exchanges” variant, getting data from both spot and derivative trading platforms.
When this metric rises, it indicates holders are moving their coins to exchanges, likely to swap ETH or cash out. This can increase the asset’s selling supply, potentially driving prices down. Conversely, a decrease suggests reduced selling supply, indicating holders are accumulating and remain bullish on Ethereum. Despite low prices, more ETH is being bought and withdrawn from exchanges, intensifying the supply shock, a bullish scenario for Ethereum.
What’s Next For ETH Price?
Ether’s recovery is facing significant resistance at $1,695, suggesting that sellers are still active and taking advantage of small price surges. However, buyers continue to defend the $1,645 level strongly. As of writing, ETH price trades at $1,656, declining over 0.7% in the last 24 hours.
A weak rebound often points to a lack of energy from buyers. This increases the possibility of an immediate decline below the strong support. If the price decreases and falls below $1,645, it would indicate the continued dominance of the bears. Following this, the ETH price might approach the recent low of $1,550.
On the other hand, if the price surges from its present position and surpasses the upward trend line at $1,700, it could signal the beginning of a strong recovery. The initial target might be above the 50-day EMA at $1,720. If the price goes beyond this, it could aim for $1,860.
