The price of Ethereum has been fun to watch, rising more than 30% in less than two months since the beginning of 2024. Recent on-chain revelations suggest that ETH investors are approaching the market with more confidence, as it appears the cryptocurrency’s price rise is not over yet.
$2.4B worth of ETH leaves Exchange: CryptoQuant
An anonymous analyst on CryptoQuant’s Quicktake revealed that a significant amount of Ethereum tokens have been leaving exchanges over the past few weeks. This observation is based on the “Exchange Reserve” indicator, which tracks the amount of ETH tokens in wallets on all centralized exchanges.
If the value of this metric increases, it means that investors are depositing more assets (in this case Ether) than withdrawing them to centralized exchanges. Meanwhile, the decline in the indicator means that more assets are leaving these platforms than are entering them.
According to data from CryptoQuant, more than 800,000 ETH (equivalent to approximately $2.4 billion) has been exfiltrated from cryptocurrency exchanges since the beginning of the year. Typically, significant volumes of cryptocurrency moving across these platforms indicate increased investor confidence.
Ethereum's exchange reserve | Source: CryptoQuant
As the CryptoQuant Quicktake author noted, a decline in Ether’s exchange reserve balance could be a bullish catalyst for altcoin prices. If the supply of ETH on exchanges continues to decrease, this could lead to a supply crunch, potentially pushing the price of Ethereum higher.
As of this writing, the price of Ethereum is around $2,920, down 1.8% over the past day. Nonetheless, the “king of altcoins” remains in the green for the week, with its price up nearly 5% compared to last week.
Ethereum price rises due to Dencun upgrade expectations: Grayscale
In a recent report, Grayscale provided commentary on Ethereum’s positive price performance so far in 2024. The asset management firm linked ETH’s bullish trajectory to the upcoming Dencun upgrade of the Ethereum network.
William Ogden Moore, research analyst at Grayscale, wrote in the report:
We believe recent price performance reflects market expectations of this upgrade, as Ethereum (up 26% YTD) has outperformed the broader smart contract platform sector (up 3% YTD) since January 1, 2024.
The Dencun upgrade, which is less than a month away, will aim to improve Ethereum in terms of scalability and cost-efficiency. It is also expected to help the network compete with “faster chains in the cryptocurrency sector, smart contract platforms like Solana.”
Another story that could boost ETH prices is the approval of an Ethereum spot exchange-traded fund (ETF) in the United States. Interestingly, Grayscale is one of the asset managers looking to launch an Ether spot ETF.
Ethereum price at $2,923 on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image from Unsplash, chart from TradingView
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