A decrease in the cryptocurrency’s exchange balance is seen by analysts as a positive signal. The supply of the asset falls, and this stimulates the growth of its value.
Glassnode analysts found that the volume of ether (ETH) on exchanges has been decreasing over the past few days. The cryptocurrency’s inflow to the trading floors is much lower than its outflow, which creates conditions for the formation of a deficit of ETH.
Altcoin on the night of Wednesday, March 30, is trading at $3450. The rise in the value of ether is seen on the back of the activation of the ten largest ETH addresses.
A report from the Santiment team says the whales have accumulated as much as 23.7% of the total supply of ether. They are not going to dump their reserves and prefer to send ETH to offline storage.
A similar trend was observed in the first half of 2017. At that time, whale wallets also predominantly hoarded ether, which contributed to a decrease in its exchange supply. As a result, we saw the famous run of Altcoin during the hype of five years ago.
Investors sent up to $5 billion worth of ETH to exchanges in a week, with more than $6 billion worth of outflows, suggesting that about 20% more ether leaves trading floors than enters them daily.
The $3,000 mark is seen by analysts as a strong support zone for the cryptocurrency. The bulls will try to push it to $4000 or even $5000 in the coming days.