YEREVAN (CoinChapter.com) – Ethereum’s native token, Ether (ETH), traded at $1,250 on Nov 16, generally following in Bitcoin’s footsteps throughout the quarter. Meanwhile, the on-chain data from the analytical platform Santiment shows a possible price uptrend based on heightened accumulation and thinning of exchange reserves.
Ethereum accumulation ON as exchange reserves dwindle
The chart below shows a significant decline in addresses holding 100,000 to 10 million ETH tokens and a simultaneous inflow in all other holder wallet-size categories.
However, the situation calls for further clarification. In detail, wallet balances from 100,000 to 10 million ETH could represent addresses belonging to exchanges.
The digital asset market is in a dangerous position as the prices collapse, endangering the DeFi sector. As a result, the recently-crashed FTX exchange and other crypto trading platforms chose to offset some of the damage and partially unload their ETH reserves to restore liquidity.
Hence the drop in the large wallet holdings.
Moreover, the FTX implosion caused a bank run, as many investors now secure their crypto outside trading platforms. Thus, the chart above also shows that all the other holders, i.e., wallets containing 0.01 to 10,000 ETH, are on the move, actively ‘buying the dip’ and storing it independently from exchanges.
Another Santiment chart backs the assumption, showing a distinct exchange outflow since the FTX collapse.
The said on-chain activity and accumulation could result in a price uptrend. As mentioned, Ethereum also heavily depends on Bitcoin and broader market conditions, which don’t favor the bulls just yet. However, ETH’s price could gain in the long term with additional help from technical indicators.
ETH to $4K in the long haul
As CoinChapter previously reported, Ethereum traded within a bullish pattern known as the ‘falling wedge’ since Oct 2021.
The formation entails two falling trendlines that enclose the price action through consecutive retests. Moreover, the height of the triangle’s thickest section determines the price target, pinning it at $4,000 for ETH.
Admittedly, the upside move is not likely to happen before the end of 2022, given the ubiquitous distress on the market. Furthermore, the declining trading volumes on the daily chart back the short-term bearish prognosis, underscoring the slim chance for a solo altcoin rally.
Thus, should the largest altcoin fall in the upcoming sessions, the next likely support would stand around $1,050, a 16% drop from the current value. Notably, the said level has provided support for Ethereum since June 2022.
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