- According to the recent trend of exchange reserve, ETH reserves are dropping faster than Bitcoin, likely to continue ahead of the London Hardfork.
- Frequent Binance Smartchain rug pulls, and lower gas fees have increased popularity and demand for Ethereum among traders.
- BTC short open interest persists, the Bitcoin bear market is not over until the shorts are purged.
Ethereum's London Hardfork is approaching, and ETH is leaving exchange wallets faster than Bitcoin. Bitcoin price is recovering from the drop; however, the persistent GBTC discount suggests a shortage of demand.
Ethereum reserves continue dropping ahead of the London Hardfork
The amount of Ethereum held in all exchanges' wallets indicates the ETH supply available for selling, purchasing, and margin trading. The metric has continued its downward slide that started on June 26 at 20.8 million ETH. As of July 26, the reserves are at 19.7 million.
The dropping reserve is currently a bullish development for the top altcoin since the value of ETH staked in the ETH2 staking contract now stands at 6.4 million. Ethereum leaving exchanges is being staked or stored in private wallets. This signals possible bullish sentiment of traders ahead of the implementation of the Ethereum improvement proposal (EIP) 1559 protocol in the London Hardfork.
Ethereum all exchange reserves
There is an increasing interest and demand for Ethereum as rug pulls become more frequent on the Binance Smart Chain (BSC). Earlier in July, the number of unique addresses on BSC reached a new all-time high of over 83 million; the previous significant increase coincided with ETH gas fees recording new highs.
BSC has suffered over nine exploits in 2021 that accounted for over $370 million in losses. In 2020, the attacks in their entirety cost a staggering $154 million to users on the network. Frequent attacks have emerged as a factor driving several developers and users away from BSC network projects and toward Ethereum.
The volume of Ethereum staked in the ETH2 contract has increased alongside the increasing frequency of these attacks. The increase in trader interest in the altcoin has made it more attractive than Bitcoin in the current recovery. Though Bitcoin is trading above the $38,000 level, there is still open interest in Bitcoin shorts that have not yet been purged.
A combination of the open interest in BTC shorts and negative funding rates signals that traders have a bearish outlook. Willy Woo, an independent Bitcoin analyst, recently tweeted
Shorts not out of trouble yet, lol.
— Willy Woo (@woonomic) July 26, 2021
(Still a lot of short open interest to purge)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin Weekly Forecast: Further upside likely after hitting new all-time high
Bitcoin (BTC) surged more than 10% this week, hitting a new high of $76,849 on Thursday, buoyed by the crypto-friendly candidate Donald Trump’s victory in the US presidential election.
Cardano breaks above descending trendline, eyes April high as bullish momentum builds
Cardano extends gains on Friday, following a close above a descending trendline the previous day. Technical indicators and on-chain data show bullish momentum, suggesting a rally ahead.
Top 3 Price Prediction: BTC touches new all-time high near $77,000 following Fed rate cut
Bitcoin price rallied and reached a new all-time high of $76,849 following the US Federal Reserve’s 25 basis point rate cut. Ethereum and Ripple followed suit and closed above their key resistance levels, hinting at a possible rally ahead.
Bitcoin, crypto market remain in uptrend following 25 bps Fed rate cut
Fed Chair Jerome Powell stated that the FOMC lowered the Fed funds rate by 25 basis points. The rate cut comes after Bitcoin reached a new all-time high price upon Donald Trump's election victory.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.