Ethereum Exchange Reserves Rise Amid Death Concerns, Where Will ETH Go?

There has been a shift in the Ethereum market as rising exchange reserves signal a possible new phase of distribution that coincides with growing concerns of a death cross.

This is evidenced by CryptoQuant’s Ethereum Exchange Reserve metric, which tracks the amount of ETH held in exchange wallets.

Ethereum in danger

When the metric rises, it often suggests that traders are moving their ETH to exchanges, preparing to sell, which can increase supply pressure and contribute to a downtrend. This was seen between June and August, when the metric had a steady upward trend, coinciding with a major downward shift in the price of Ethereum.

The situation has become more complex following the death crossover, a technical pattern where the 100-day moving average falls below the 200-day moving average, often indicating a long-term downtrend.

Following this development, the Exchange Reserve metric has risen again, suggesting that a new distribution phase may be developing as traders continue to unload their holdings according to the latest observations from a CryptoQuant analyst.

This increase in exchange reserves is a potential red flag as it indicates that more ETH is available for sale, which could drive prices down further if demand does not increase.

Poor Feeling

Spot Ethereum ETFs, which were expected to boost the price of the crypto-asset, witnessed $477 million in outflows since their launch this summer. Adrian Fritz, head of research at 21Shares, which launched a spot Ethereum ETF, said:

“A lot of people were excited until the launch, and then it became kind of a ‘sell the news’ event. With more education and time, you’ll also see more excitement around the ether.”

But the lack of institutional interest is not the only factor affecting Ethereum. Brian Rudick, researcher at crypto trading firm GSR, suggests that the main reason for the crypto asset’s underperformance is the bad sentiment surrounding its rollup-focused roadmap, especially after network fees have down significantly.

This has raised doubts about Ethereum’s positioning, with some arguing that it is “stuck in the middle” between Bitcoin, seen as the best store of value, and Solana, considered the leading high-performance blockchain.

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