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- Coinbase’s Ethereum exchange reserves have been decreasing over the past five days.
- According to CryptoQuant analysts, this usually leads to an increase in the price of the coin.
CryptoQuant analyst Crypto Sunmoon noted that Coinbase’s Ethereum (ETH) exchange reserves have decreased over the past five days. report.
This decline in holdings could potentially mean users are looking to pull their ETH off exchanges or move their ETH elsewhere due to the coin’s recent price consolidation amid a surge in profit-taking activity.
Some users may also transfer ETH from Coinbase to other wallets or platforms for various reasons such as staking, DeFi participation, or self-storage.
Regardless of the reason, Sunmoon noted that this decline is a good sign for the coin’s price. According to analysts:
“A decrease in Coinbase ETH exchange reserves often results in a short-term increase in the price of Ethereum.”
Sunmoon added that Coinbase’s current ETH holdings have declined for the first time since the coin was trading at the $1600 price level in September.
Is Ethereum well prepared for the expected rally?
Market participants are refraining from executing large trades due to uncertainty about the coin’s next price direction, but it has posted a 20% rally in the past month. CoinMarketCap showed it
At press time, the major altcoin was trading at $2391. Price movements observed on the daily charts show that bearish activity may have subsided due to the re-emergence of bulls.
Source: ETH/USDT on TradingView
ETH’s Directional Movement Index (DMI) reading shows that on December 26, the positive directional index (green) exceeded the negative directional index (red).
These crossovers often signify the potential for a new upward trend in the underlying asset. Whenever this phenomenon occurs, it means that upward momentum overwhelms downward momentum. Since December 26, the price of ETH has increased by 5%.
Additionally, the coin’s Moving Average Convergence Divergence (MACD) indicator confirmed the start of a new bullish cycle. During the intraday trading session on December 27, the MACD line crossed the rising trend line.
Read Ethereum (ETH) price prediction for 2023-24
This upward crossover occurred after the MACD line remained below the trend line for over a week, indicating increased selling of the coin in the ETH market.
The crossover shows that the short-term moving average is starting to accelerate faster than the longer-term moving average. This means that upward momentum increases.