Key Notes

• A massive 360K ETH tokens were withdrawn from exchange in the past two days.
• ETH supply on exchanges has dipped to 8.97 million, which is the lowest since November 2015.
• ETH recently lost the crucial support level at $2,050 and now trades at $1,970
  .

Ethereum

ETH
$1 977

24h volatility:
1.6%

Market cap:
$238.51 B

Vol. 24h:
$12.83 B

has been at the center of attention after it touched the $2,000 mark, but lost it not long after. 

Related article: Ethereum Bottom Is In: No More Sub-$2,000 Levels?

Despite a record-low supply on exchanges, ETH has struggled to gain upward momentum, declining nearly 47% from its December high of $4,105 to its March 21 price of $1,970, according to CoinMarketCap.

According to blockchain analysis platform Santiment, Ethereum’s available supply on exchanges has dropped to 8.97 million ETH, the lowest since November 2015.

This marks a 16.4% decline in just seven weeks, fueled by the rising popularity of decentralized finance (DeFi) and staking. 

The reduction in exchange-held ETH suggests an ongoing accumulation phase, which historically has led to supply squeezes that favor bullish price action in the long term.

Also, as per prominent analyst Ali Martinez, a whopping 360,000 ETH tokens were withdrawn from crypto exchanges in the last 48 hours, suggesting that holders are bullish on the price action of the cryptocurrency. 

Martinez also shared a chart highlighting key support and resistance levels, with a recent breakdown below a critical horizontal support level around $2,050.

The chart also suggests a measured move target significantly lower, possibly near $1,100, based on the distance between the previous range’s resistance and support levels. 

Despite the supply crunch, ETH has underperformed due to reduced mainnet activity and declining fee revenue. 

Ethereum Layer-2 networks such as Arbitrum and Base have gained traction, offering lower transaction fees, which has drawn users away from the Ethereum mainnet. 

This shift has impacted Ethereum’s revenue, with fees dropping from $218 million in December to just $46 million in February. Moreover, Ethereum’s total value locked (TVL) in DeFi has declined from $76 billion in December to $46 billion.

Institutional interest in Ethereum remains tepid, with $370 million in outflows from Ethereum Spot ETFs over the past month. 

However, the upcoming decision by the United States Securities and Exchange Commission (SEC) regarding Ethereum staking ETFs could change the game. 

If approved, staking ETFs could provide a new avenue for institutional investors, increasing demand and reducing liquid supply further.

In February, Cboe BZX Exchange filed a 19b-4 application for approval to stake ETH held in an Ethereum ETF on behalf of 21Shares.

The Relative Strength Index (RSI) stands at 40.72, signaling neutral to slightly bearish momentum for Ethereum. The gradient of the line suggests sluggish momentum in the short term.

Ethereum’s price is trading near the lower Bollinger Band, indicating that it is in a downward trend but could see a temporary mean reversion toward the middle band ($2,040.92). 

The upper resistance level at $2,368.70 remains a key level to watch.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

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Parth Dubey

A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.

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