Between May 23 and June 2, the total exchange balance of Ethereum decreased by 797,000 ETH ($3 billion), according to data from CryptoQuant.
This indicates a reduction in the number of coins available for sale, as investors transfer assets to non-custodial wallets.
On May 23, the U.S. Securities and Exchange Commission began discussing the S-1 form in applications for the registration of spot Ethereum ETFs.
A similar trend in the dynamics of available coins on CEX is observed with Bitcoin.
? Exchange balances for both #Bitcoin and #Ethereum are at their lowest levels in years!?
Whales continue to accumulate. #BTC on exchanges is down to 11.6% and #ETH is at 10.6%!
Supply squeeze incoming. ?
Get ready for the next big move. ? pic.twitter.com/u4j13DZBJk
— Leon Waidmann | On-Chain Insights? (@LeonWaidmann) June 2, 2024
“Exchange balances of the first and second largest cryptocurrencies by market cap are at multi-year lows. The share of digital gold [from the total supply] has decreased to 11.6%, and Ethereum to 10.6%! Whales continue to accumulate. Supply is shrinking. Prepare for the next big move,” wrote BtcEcho analyst Leon Waidmann.
Amid potential ETF approvals, QCP Capital suggested a 60% increase in the price of the second-largest cryptocurrency by market cap, potentially reaching $6000. Experts based their forecast on market dynamics following the launch of BTC-ETF.
Previously, DeFiance Capital founder and CEO Arthur Cheong predicted a target of $4500 for Ethereum even before the launch of spot ETFs.
According to Michael Nadeau from DeFi Report, Ethereum might benefit more from purchases than Bitcoin due to the absence of “structural selling pressure” from miners.
“ETH is a technological play on the growth of Web3. […] While the first cryptocurrency is digital gold,” —explained the specialist.
Bloomberg analysts expressed less optimism. James Seyffart forecasted demand for ETH-ETF at 20–25% of spot ETFs based on Bitcoin, while his colleague Eric Balchunas estimated it at 15–20%.
Experts from JPMorgan shared this view. One reason cited was the outflow of funds from the ETHE by Grayscale, similar to what happened with the GBTC after the launch of Bitcoin ETFs.
Omkar Godbole from CoinDesk noted increased optimism among Ethereum options traders.