Ethereum (ETH) is currently witnessing significant developments in the virtual currency market. New data reported today by market analyst Merlijn shows that ETH supply on exchanges is decreasing and staking rates are rising to new heights.
As per the data, these are very important signals for the asset’s upcoming price action in the next few weeks or months. The developments indicate a significant change in user sentiment, as investors appear to be moving away from short-term trading to long-term staking and token holding.
Ether Supply on Exchanges Declining
Whenever as asset’s circulating supply on exchanges decreases, it suggests most token holders are not intending to put their assets on sale in the near future. They opt to store their tokens in cold wallets with a focus on long-term holding, while many investors prefer sending Ether tokens for long-term staking to earn better returns.
These events lead to decreases in available ETH supply. A reduction of ETH supply on exchanges, with either an increase or constant Ether demand, means the price is likely to surge. In the past, such events often happened before substantial price uptrends.
Moving down, the surging quantity of Ether being staked is a strong bull indicator. Rising staking rewards (as indicated in the data), together with increasing belief in long-term holding, motivate investors to withdraw their Ether from on-chain circulation.
This leads to greater supply decreases. According to late last month, as of July 27, almost 30% of the entire Ether supply is staked. That is more than 35.2 million ETH is currently in staking, showcasing a strong dedication to ETH holders.
ETH Set To Reclaim $3000+ Level
The interplay of these two catalysts develops a strong trend for a looming, quiet price rally. The contributors to this potential upward momentum are the asset’s robust underlying fundamentals and a decrease in selling pressure.
With reduced Ether supply available for trading and a rising amount of ETH tokens being moved to staking networks, any rejuvenated purchasing frenzy or institutional purchase (particularly for Ethereum ETFs) can activate a swift price rise.
Today, Ethereum’s value is currently standing at $2,622, up 2.6% from yesterday. It has also been up 6.7% and 5% over the past week and month, respectively, highlighting its stability. The underlying market mechanisms (mentioned above) signal that the asset’s price could in a temporary pause before embarking on a substantial bull run that is set to pump its value above the $3000 mark.
