Journalist
Posted:
- Over the past five days, there has been a dip in Coinbase’s Ethereum exchange reserve.
- According to a CryptoQuant analyst, this is usually followed by an increase in the price of the coin.
Over the past five days, Coinbase’s Ethereum has seen a decline [ETH] exchange reserve, said pseudonymous CryptoQuant analyst Crypto Sunmoon in a new report.
This drop in reserves could mean users are taking their ETH off the exchange, possibly due to the coin’s recent price consolidation amid the surge in profit-taking, or they are trying to move their ETH elsewhere.
Some users may also transfer their ETH from Coinbase to other wallets or platforms for various reasons such as staking, participating in DeFi, or self-custody.
Regardless of the reason, Sunmoon noted that this drop is a good sign for the coin’s price. According to the analyst:
“The price of Ethereum often experiences short-term gains as the Coinbase ETH exchange reserve declines.”
Sunmoon further added that the current drop in Coinbase’s ETH reserve marks the first time since the coin started trading at the $1,600 price level in September.
Is Ether Well Poised for the Predicted Rally?
Although market participants have been discouraged from making large trades due to uncertainty over the currency’s next price direction, the coin has risen 20% in the past month, data from CoinMarketCap showed.
At the time of writing, the leading altcoin was trading at $2391. Price movements on a daily chart showed that bearish activity may have moderated due to the re-emergence of the bulls.
Source: ETH/USDT on TradingView
According to measurements of ETH’s Directional Movement Index (DMI), the positive directional index (green) exceeded the negative directional index (red) on December 26.
This crossover often means a potential for a new upward trend in the underlying asset. When it occurs, it means that upward momentum dominates downward momentum. Since December 26, the price of ETH has increased by 5%.
Furthermore, the coin’s moving average convergence-divergence indicator (MACD) confirmed the start of a new bull cycle. During the intraday trading session on December 27, the MACD line intersected the trend line in an uptrend.
Read Ethereum’s [ETH] Price forecast 2023-24
This upward intersection came after the MACD line was below the trend line for more than a week, indicating that the ETH market was seeing a larger sell-off of coins.
The crossover showed that the shorter-term moving average is starting to accelerate faster than the longer-term moving average. This indicates increasing bullish momentum.