Key Points
- Ethereum (ETH) selling pressure may decrease due to a drop in exchange balances.
- Investor confidence in Ethereum’s potential recovery is indicated by bullish market sentiment and long-term holding trends.
Ethereum (ETH) investors could soon see a decrease in selling pressure. Recent data shows a decline in ETH balances on major cryptocurrency exchanges, suggesting a potential stabilization of prices in the near future.
Reducing Ethereum Selling Pressure
Blockchain analytics firm Glassnode reports a significant decrease in the amount of ETH held on exchanges over the past two months. Exchange-held ETH has fallen from 13.34 million to 12.21 million. This suggests that traders and investors are moving their ETH to private wallets or decentralized platforms, indicating a reduced intention to sell.
This decrease in exchange balances aligns with broader market movements. Recently, ETH experienced volatility, dropping by 18% from July 1 to July 8, before recovering to approximately $3,122. Over $300 million in leveraged long positions were liquidated during this period, contributing to market uncertainty.
Market Sentiment and Holding Trends
Despite the price volatility, market sentiment remains cautiously optimistic. ETH derivatives markets show a preference for call (buy) options over put (sell) options, indicating a bullish sentiment among traders. This suggests confidence in Ethereum’s potential recovery and future price growth.
Approximately 40% of Ethereum’s circulating supply is currently locked in staking and decentralized applications (dApps), indicating a strong commitment from investors to hold their ETH. Golem, a large ICO-era ETH holder, recently halted selling activities after a liquidation spree and staked 40,000 ETH ($124.6 million), reinforcing the trend of major holders holding rather than liquidating their assets.
Analyst Leon Waidmann notes the significance of this trend, suggesting that institutional interest is expected to rise with the upcoming launch of an ETH Exchange-Traded Fund (ETF). This institutional demand, combined with shrinking exchange supplies, could potentially support Ethereum’s price stability and pave the way for a future rally.
Ethereum’s Ecosystem Strength
Ethereum’s total value locked (TVL) remains steady at 17.7 million ETH, indicating strong activity within its dApp ecosystem and layer-2 solutions. Over the past month, Ethereum’s layer-2 solutions such as Arbitrum, Blast, and Base have shown substantial growth in transaction volumes, outpacing competitors like BNB Chain and Solana in terms of activity.
As the cryptocurrency market continues to adjust, Ethereum investors and traders are preparing for a potential price recovery above previous support levels, with expectations that ETH will surpass its yearly all-time high (ATH).
