New Delhi (CoinChapter.com) — Ethereum (ETH) is a crypto that seems hard to put down. Last week’s market crash saw its prices go down by almost 57%. However, the number two cryptocurrency by market cap has been on the rise since May 23. Several factors fueled this rally, and experts speculated the ETH/USD rate to reach $3,000 soon.
An indicator favoring the upside speculation is the Ethereum balance across all the crypto exchanges. Any coin’s reserves inside exchanges’ vaults are a gauge of investor sentiment. If investors think that a coin will rally to a higher price, he/she prefers to HODL the token in his/her private wallets.
As a result, cryptocurrency balances on exchanges decrease. Similarly, if the investors believe that fall in prices is imminent, they deposit the concerned token back into exchanges to either sell or trade them for other assets.
Ethereum prices are seeing a strong rally, maintaining a daily high above $2,500 over the past few days. Though Bitcoin is recovering too, its progress is not at par with Ethereum’s.
Also read: Ethereum Price Could Reclaim $3,000, Says Top Executive
Ethereum’s Reserve Changes Indicate Strong Comeback?
Ethereum reserve vs. price chart forecasts hodling sentiments. As of May 26, only 20.399 million Ethereum was in exchanges. In fact, ETH exchange inflow has seen a steady decline since May 23. Incidentally, the same day the coin started recovering.
In comparison, Bitcoin’s reserve vs. price chart shows a dumping pattern. BTC’s balance in exchanges has increased consistently over the past few weeks. Exchange NetFlow is fluctuating, but the rising balance indicates a selling pattern in investors’ minds.
These trends have sparked positive speculations from investors and analysts alike. Given that bitcoin’s recovery has been choppy at best, ETH is gaining favor with investors.
Cryptoquant’s Twitter handles reposted this tweet, which lines up with the market viewpoints of the past few days. Altcoins, including ETH, have been recovering better than Bitcoin. The reason behind the slower recovery of BTC is the crash it caused post its own decline.
Stablecoin Supplies Going Up as BTC Prices Fall
Stablecoins are new entrants to the cryptocurrency game. Their value is dependent on assets outside the crypto umbrella, like Gold or US Dollar. Stablecoins aim to provide stability to an otherwise volatile crypto market.
Stablecoins reserves across exchanges have increased.
Glassnode, a blockchain data, and intelligence provider, pointed out this trend on Twitter. Stablecoins can be used to buy other cryptocurrencies. An increase in exchange balance suggests a greater prospect of investors trading these coins.
There is a strong chance these coins will be used to buy ETH, BTC, or other altcoins. If this happens, it will further fuel the bullish rally that Ethereum is experiencing.
Also, bitcoin is bound to benefit from this as well, being the flagship of the crypto bandwagon. Who knows, maybe stablecoins will live up to their name and bring back the “stable” growth that cryptocurrencies were enjoying before the fall
A Delhi based content writer, I did my bachelors in engineering with major in electronics and communications. I first heard of bitcoin while writing an article about blockchain technology a few years back, and have been following it ever since. Bitcoin may well be current big thing happening in the finance industry, and it feels like the right time to join the crypto bandwagon.
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