According to Glassnode data, ETH balances on exchanges have plummeted to just 12.6% in the last 30 days, indicating a significant decrease in available tokens for sale.
Typically, this reduced supply on exchanges is viewed as a positive indicator for price movement, suggesting that there is less selling pressure.
The spike in withdrawals from exchanges at the beginning of June, coinciding with the regulatory crackdown on major platforms like Binance and Coinbase, should be considered alongside this data.
While some investors were prompted to withdraw their funds due to concerns over centralized exchanges, the magnitude of the withdrawals mirrors the situation in November 2022 when ETH experienced a sharp 33% surge following a similar dip in exchange balances.
Additionally, the amount of ETH locked in staking contracts has seen a substantial increase since the Shapella upgrade in April. Currently, over 23 million ETH, equivalent to 19.1% of the total supply, is deposited in staking contracts.
Moreover, Glassnode’s data reveals that nearly 30% of ETH’s supply is now locked in smart contracts, including decentralized finance and staking contracts, up from 25.5% at the start of 2023.
This trend further reduces the liquid supply of ETH, which is positive for its price trajectory.
Analyzing the price action, Ether has broken above the 50-day moving average, indicating a bullish breakout.
Currently facing resistance around the $1,906 level, the ETH/USD pair has shown higher lows since November 2022, with the $1,900-$2,000 range acting as both technical and psychological resistance levels.
A successful breakthrough above $2,000 could potentially propel Ether towards the $3,000 mark, aligning with the targets of the bullish ascending channel pattern.
Meanwhile, the ETH/BTC pair is seeking support around the 2023 lows of 0.06255 in Bitcoin terms. A breach below this level could expose bearish targets of 0.05689 BTC.
However, the relative strength index metric suggests oversold readings for the ETH/BTC pair, hinting at a possible pullback.
Traders should remain cautious as the funding rate for the ETH perpetual swap contract has surged to monthly highs.
This serves as a warning for late buyers, as perpetual swap traders must pay funding rates on their open positions depending on demand.
If short orders outweigh long orders, shorting becomes relatively more expensive, leading short traders to compensate long traders.
While a temporary pullback towards the lower boundary of the ascending triangle pattern around $1,680 is plausible, the overall on-chain movements and market indicators favor an upward trajectory in the short to medium term.
Additionally, Bitcoin’s price action and the ability of BTC buyers to sustain the $30,000 level will play a significant role in maintaining Ethereum’s bullish momentum.
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