Since January 2021, the amount of Ether (ETH) held on cryptocurrency exchanges has been steadily declining. This trend leads to a shortage of altcoin supply, which should have a positive effect on its value.
As a reminder, on February 20 for the first time the ether broke above $ 2,000, but it could not stay at this height. Already on February 28, the coin fell to $ 1388 amid a general market correction.
In early March, ETH resumed its expansion, but so far the altcoin lacks support to retest values above $ 2000. Today, March 17, Ether is trading at around $ 1800. Its capitalization is now just over $ 207.234 billion.
The long-term outlook for altcoin looks optimistic. Since January, the outflow of cryptocurrency from exchanges has continued, which is partly due to the accumulation of funds in the ETH 2.0 deposit contract (more than 2% of the total market supply of ether).
The CryptoQuant team notes that the shrinking ETH balance eases pressure, which should ultimately push the coin higher.
Chart 👉 https://t.co/1bs87PnGJm pic.twitter.com/MG22PaIaFZ
— CryptoQuant.com (@cryptoquant_com) March 15, 2021
Researchers also stressed that if the number of bitcoins on exchanges has periodically increased and decreased since January, then the ETH balance on trading floors has been steadily decreasing for several months.
Now we are witnessing a consolidation, traders expect a resumption of ether growth as the demand for risky assets increases. The stock market is gaining momentum again, bitcoin and other digital currencies can take advantage of the positive trend and get their share of the capital.
According to analyst Michael van de Popp, the result of the new ETH race will not only hit the $ 2,000 mark, but also achieve higher values.