Recent data has revealed a significant drop in the supply of Bitcoin (BTC) and Ethereum (ETH) on exchanges. The supply of BTC on exchanges has decreased to 11.6%, while ETH supply has dropped to 10.6%. This indicates that crypto whales are accumulating these tokens and transferring them to self-custody. The decrease in exchange balances suggests that a supply squeeze is on the horizon, potentially leading to upward price movements for Bitcoin and Ethereum.
Analysts are advising investors to prepare for the next significant move in the crypto market. The approval of Spot Ethereum ETFs by the Securities and Exchange Commission (SEC) has triggered a withdrawal of almost 777,000 ETH ($3 billion) from exchanges. These ETFs are expected to ignite a bull run in the market once they are officially launched. It is evident that investors, particularly crypto whales, are positioning themselves ahead of this anticipated development.
Although the approval of Spot Ethereum ETFs is expected to have a positive impact on the price of Ethereum, research firm Kaiko has issued a word of caution. It is suggested that there may be significant selling pressure on Ethereum due to potential outflows from Grayscale’s Spot Ethereum ETF. This warning is based on the $6.5 billion outflows that were observed with Grayscale’s Spot Bitcoin ETF, leading to a notable decline in Bitcoin’s price.
Crypto analysts have pointed out key differences between Ethereum and Bitcoin that could influence their price movements. Ethereum is predicted to achieve a new all-time high faster than Bitcoin did following the launch of Spot Bitcoin ETFs. This is attributed to the fact that Ethereum validators do not have to sell their holdings to cover operating costs, unlike Bitcoin miners. Additionally, 38% of Ethereum’s supply is locked on-chain, indicating that Ethereum is more reflexive than Bitcoin.
The current decrease in exchange balances for Bitcoin and Ethereum, coupled with the impending launch of Spot Ethereum ETFs, suggest that significant price movements are on the horizon. Investors should pay close attention to these developments and consider the potential impacts on the market. While there are predictions of a bullish market, warnings have also been issued regarding potential selling pressure. The differences between Ethereum and Bitcoin further highlight the unique factors that can influence their respective price movements.
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