Ether price eyes $3K as exchanges’ ETH balances drop to an all-time low

Ethereum is showing signs of bullishness as its exchange balances hit an all-time low and staking deposits continue to increase dramatically.

Ether (ETH) appears likely to reach $3,000 again if buyers can break through the resistance level between $1,900 and $2,000, as indicated by its technical charts.

ETH held on exchanges hits an all-time low

Exchange holdings of ETH have hit a new low of 12.6%, showing a dramatic decrease in the last month, according to Glassnode’s report. A decrease in the amount of ETH held on exchanges is typically seen as a positive sign, as it implies fewer tokens are available to be sold.

The netflow of deposits and withdrawals from exchanges has seen a dramatic increase in withdrawals since the beginning of June, likely due to the regulatory scrutiny of Binance and Coinbase.

The data should be viewed with caution, as investors were scared away from centralized exchanges, leading to the withdrawals.

Despite the large withdrawals and positive price movements, the situation is reminiscent of November 2022 when ETH experienced a 33% rise after a similar decrease in exchange reserves.

At the same time, the amount of ETH locked in staking contracts has seen a sharp rise since the Shapella upgrade in April. Currently, more than 23 million ETH is held in staking contracts, making up 19.1% of its overall supply.

Glassnode’s statistics reveal that almost 30% of ETH’s supply is currently secured in smart contracts, such as decentralized finance and staking contracts, an increase from 25.5% at the beginning of 2023.

Withdrawals from exchanges and deposits into smart contracts being on the rise is beneficial to the price of ETH, as it decreases its available supply.

ETH/USD price analysis

Ether’s value surpassed the 50-day moving average of $1,823.09, demonstrating bullish behavior.

The ETH/USD pair is currently encountering resistance near the $1,906 horizontal level. Since November 2022, the pair has experienced successive higher lows, and the $1,900-$2,000 range is acting as both technical and psychological resistance levels, in line with the ascending triangle pattern.

A surge above $2,000 could quickly drive ETH toward the 2022 breakdown levels of approximately $3,000. The objectives of the bullish ascending channel pattern are also in line with these levels.

The ETH/BTC pair appears to be trying to build a base at the 0.06255 BTC mark, which is the low from 2023. If the price drops below this point, it could potentially test the bearish target of 0.05689 BTC.

The relative strength index metric for the ETH/BTC pair is indicating that it is oversold, which suggests that a rebound is probable.

The rate of financing for the ETH perpetual swap agreement rose to near its highest point for the month, serving as a warning for those who purchased it later.

The impetus of a Bitcoin ETF has ignited a “fantastic” breakout in the BTC price, pushing it to $29K.

When there is more demand for short positions than long positions, traders who have taken a short position must pay a funding rate to those on the long side, making it more expensive for them to keep their positions open.

It is possible that the ETH/USD pair will see the price fall back to the lower boundary of the ascending triangle pattern, around $1,680.

Despite this, on-chain activity and market signals suggest that there is a greater likelihood of an upward trend over a short to medium-term bearish trend.

The performance of Bitcoin and the strength of those buying BTC at the $30,000 mark will be important in sustaining Ether’s bullish trend.

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