- Data from CryptoQuant shows that Bitcoin and Ethereum exchange balances have fallen.
- Technical analysis points to significant price movements for both cryptocurrencies if key resistance levels are broken.
Bitcoin [BTC] was trading just below $70,000 at the time of writing, reflecting a moderate increase of 2% in the past 24 hours, although it remains below the March peak of over $73,000.
This continued asset growth is part of a broader story that underlines the complexity of crypto market movements.
Conversely, Ethereum [ETH] has shown remarkable stability, maintaining a position above $3,800. This stability comes despite a slight decline of 2.5% over the past day and is stabilizing today with a minimal increase of 0.7%.
The stability in Ethereum’s price indicates continued interest in the asset amid fluctuating market conditions.
Bitcoin and Ethereum Market Shifts
Recent analysis by Leon Waidmann of BTC-ECHO revealed that both Bitcoin and Ethereum have witnessed their lowest exchange rate levels in years.
Specifically, Bitcoin’s presence on the exchanges has been reduced to 11.6%, while Ethereum’s has fallen to 10.6%.
Source: Leon Waidmann about X
This trend indicates a significant movement of these assets away from the exchanges and possibly signals a strategy among investors to hold their coins for longer periods.
Source: CryptoQuant
AMBCrypto’s research of CryptoQuant facts further revealed a substantial outflow of these cryptocurrencies from exchanges.
Since the beginning of May, more than $5 million worth of Bitcoin and more than $1 billion worth of Ethereum have withdrawn from the exchanges.
This move is notable because it follows the approval of spot Ethereum ETFs in the US, suggesting a potential supply contraction is on the horizon.
Source: CryptoQuant
The reduction in foreign exchange reserves implies that there are now fewer coins available for immediate trade, indicating a potential price increase due to scarcity.
Waidmann expects this to lead to a supply squeeze, and urges investors to prepare for significant market movements, noting:
“Whales continue to accumulate. Supply crunch coming. Get ready for the next big step.”
Market dynamics and technical analysis
However, Glassnode facts presents a contrasting picture, showing that circulating supply for both cryptocurrencies is increasing, indicating that despite reduced exchange availability, overall market supply remains high.
Source: Glassnode
This scenario sets the stage for possible price corrections if demand cannot keep pace with increasing supply. However, current market indicators suggest that demand is continuing as there has been no significant price decline despite growing supply.
Source: Glassnode
Meanwhile, there has been a decline in the number of new addresses for both Bitcoin and Ethereum, which could indicate declining interest among new investors, potentially impacting future demand.
Source: Glassnode
Meanwhile, the technical analysis of both Bitcoin and Ethereum reveals a potentially intriguing feat on the horizon.
Focusing on Bitcoin’s daily chart, it illustrates a pattern where the cryptocurrency has broken through lower support levels and recently reversed to tap into a key supply zone.
Source: TradingView
This movement usually indicates a continuation of the downward trend. However, if Bitcoin crosses the $72,000 mark, breaking the previous lower high and negating the bearish setup, it could signal a reversal to an uptrend.
AMBCrypto, citing an analyst from XBTManager on CryptoQuant, reported that Bitcoin is poised for a notable rise. The analyst suggests,
“Bitco is gathering strength for the next surge. When it gathers enough strength, a sharp rise appears imminent. It seems likely that increases similar to those seen in the third and fourth quarters will continue.”
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A similar pattern emerges on Ethereum’s daily chart. Ethereum recently entered a major supply zone, signaling an impending sell-off.
Nevertheless, if Ethereum breaks above the $4,000 threshold, surpasses the recent lower high and negates the current sell signal, it could pave the way for an upward move.
Source: TradingView