CryptocurrencyCryptocurrency ExchangesETH (Ethereum)

Ethereum Reserves on Exchanges are Decreasing

From the past few weeks, the whole crypto market seems to be in positive flux; not only Bitcoin has recovered from the deep negative plummets of value and performance but so does have Ethereum and every other cryptocurrency out there. The current market charts are booming with an increase in price, performance, and value of crypto across the board. Ether is almost ready to cross the $4k resistance, which means that it will not only be securing an all-time high but driving more traffic into the market regarding traders and investors so they can chip in their investment into the crypto, this way, they can eventually turn it into a profit.

Exchange Outflows and Deflation

Due to this immaculate market activity, the exchange reserves for Ether are currently draining; exchange outflows and deflation might be the reason for the current price action of Ether. Instead of pouring money into Ether, investors deem it fit that they withdraw their stash of crypto or just leave them in their wallets, withholding. As a result, the crypto exchanges are running dry, and wallets are filling up. This might be the very thing that the crypto market needs right now, but at the same time, the trouble emerges in the form of institutional investors and whales initiating liquidity at the current flow rate.

At the time of writing, the overall Ether reserves on the exchanges are at 18.5 million tokens, and that is a solid decrease from the month of August. Regarding the latest move into the crypto market, which has sent the prices of crypto soaring high, most of these crypto exchanges saw an influx of many new tokens because of liquidity and the numbers slightly improved from 18.49 million to 18.7 million in just two days. Due to this reason, the price of Ether has dropped from $3500 to $3400.

This rather indicates a selling pressure on the crypto market, and it seems that this will drive the price of Ether in a negative direction. Because before you know it, other investors and traders are chipping away their stash within the market to have a sense of profit from their initial investment while making the market suffer.

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