- Ether (ETH) volumes on cryptocurrency exchanges have reached a 2.5 year low
- From 26 million coins across various platforms, the reserves have dropped close to 20 million coins
- Holders/investors are anticipating severe upside volatility ahead of London Hard fork
JAIPUR (CoinChapter.com) — Data on ETH (Ethereum’s native cryptocurrency token) reserves on exchanges have showcased an exciting development, one that is very much in line with a long-term HODLing mentality amongst bullish investors. Despite a more than a 60% drop in prices to sub-$1700 levels, long-term confidence in Ether has not waned.
According to a chart shared by on-chain market insights tracking firm, CryptoQuant, the total supply of ETH on crypto exchanges has dropped to levels not seen in the last 2.5 years.
The London hard fork is nigh. Owing to the same and the activation of testnets on Rinkeby and Goerli networks, Ether has experienced significant buying pressure. As a result, ETH/USD prices rallied 30% from $1700 lows to $2400 in the last two weeks. The sentiment is so bullish that Ethereum wallets have surpassed Bitcoin wallets for the first time in the history of crypto markets. And an increasing number of BTC holders are swapping their Bitcoin holdings for Ethereum’s token.
Now, these long-term holders are moving all their recently bought holdings to private wallets. All in anticipation of sporadic upside price moves ahead of Ethereum’sEthereum’s much-awaited upgrade. FOMO is intense in ETH markets, with the last stage of the London hard fork scheduled for July 7.
What Is The London Hard Fork?
The London hard fork is a follow-up update to the Ethereum blockchain, after the Berlin hard fork(April). Two critical ”improvements” are a part of this update – EIP-1559 and EIP-3238, with the former being the most prominent one. EIP-1559 activated on July 7, will enable a “fee cap” for Ethereum transactions.
High gas fees have been an embarrassing issue for both Ethereum developers and users. Especially at the apogee of the decentralized finance (DeFi) boom this year. The scheduled update EIP -1559 will restrict the validation fees required for a particular transaction (dapp usage or monetary transfer).
The EIP-1559 code will also set a “fee burn” process in motion, introducing a “supply scarcity” feature. It is one of the reasons that is contributing to Ether’sEther’s long-term bullish outlook. Why? Since ETH token supply has been infinite since Ethereum’sEthereum’s genesis. Fee (aka gas fees quantified in ETH) burn will put excess tokens out of circulation.
Also, Read three reasons why Ethereum (ETH) is rallying.
Ethereum Technical Setup
Bears are trying to suppress the upside momentum. But the bullish sentiment is too hard to be taken down right now. ETH/USD spot rates are floating over the 20-day exponential moving average, and the MACD indicator has also flipped bullish on July 2. The pair remains well above the 200-day moving average. Bulls now have the opportunity to attempt a breakout and reverse the $2400 resistance into support, with the next target being $2600.
Reputed crypto trader and analyst also corroborated ETH’s above technical setup in his latest tweet an hour ago. “…More consolidation & staying above $2,000 would be great, as a renewed test of the zone between $2,300-2,400 would grant a breakout to $3,000”, he said.
$3000 remains the most crucial psychological barrier, with the ETH/USD pair well supported above the critical $1600-$1700 support zone. Whether London hard fork will see Ether prices top $3000 it remains to be seen.