According to a recent report by Glassnode, the number of exchange withdrawals of Ethereum (ETH) has reached a 14-month high, with a seven-day moving average of 4,405.351. This indicates a significant increase in investor confidence in the second-largest cryptocurrency by market capitalization.
This comes at a time when the markets are currently in an uncertain state as FUD about massive BTC withdrawals on Binance made rounds. The uncertainty may have also affected Ethereum’s price as the asset tumbled in today’s market session. According to TradingView charts, Ethereum is facing a short bear run as per the MACD indicator which is now moving on the negative side.
Ethereum’s volatility levels however seem to be stabilizing with the Bollinger bands now moving closer towards each other.
Possible reasons for the trend
However, the increasing number of exchange withdrawals could also be an indication of a bullish trend in the Ethereum market as investors could be increasingly choosing to withdraw their ETH holdings from exchanges, possibly in order to hold them in cold storage or use them for decentralized finance (DeFi) purposes. As more investors choose to hold onto their ETH holdings, the available supply on exchanges decreases, potentially leading to increased demand and higher prices.
This trend is also reflected in the overall performance of the Ethereum market, which has seen significant growth in recent months. Despite the recent market downturn, ETH has continued to hold its position as the second-largest cryptocurrency by market capitalization, and many experts remain bullish about its long-term prospects.
In addition to its use in DeFi, Ethereum is also being increasingly adopted by major companies and institutions. This includes the most notable development of the past few months with Visa which will enable it to use Ethereum’s blockchain to settle transactions.
However, as the Ethereum ecosystem continues to grow and evolve, it will be interesting to see how this trend develops and how it will impact the overall performance of the cryptocurrency market.