Ethereum Exchange Liquidity Drains Rapidly, What This Means for ETH Price

Ethereum (ETH) balance on centralized exchanges is declining at a rapid pace since the U.S. Securities and Exchange Commission (SEC) approved spot Ether ETF products.

Ethereum Liquidity Drain

Centralized trading platforms are considered the primary means by which most traders access cryptocurrencies, including Ethereum. The availability of this part is already under threat, as suggested by market analyst Ali Martinez.

In a recent article on Ethereum Spot ETF products were approved in the United States, approximately 777,000 ETH, valued at approximately $3 billion, was removed from the market.

crypto exchanges. Although ETH ETF products have not yet started officially trading on exchanges, the continuation of this trend could play a major role in the price action of ETH in the long term.

An intriguing trend in the chart shared by the analyst is that Ethereum’s current balance on exchanges is the lowest the coin has seen since at least December 11, 2023. Judging by the massive rate of institutional investment in Bitcoin via its spot ETF products, Ethereum could experience a supply shock in no time.

If the Ether spot ETF experiences similar accumulation as Bitcoin, it can help push the price of Ethereum forward in a very short time. The same experience was recorded for Bitcoin as the influx of corporate capital drove the coin’s price to a new all-time high (ATH) above $73,000 in March.

Many market analysts posited that all ETH needed to surpass its previous ATH at $4,891.70 was the full launch of the Ethereum ETF spot product. If the best case scenario comes true, Chartered standard

posits that the coin could reach $8,000 by the end of this year.

Other ETH Growth Catalysts

Aside from the spot ETF product, Ethereum also has different fundamentals that can help drive its price higher in the long term. Digital currency is naturally deflationary, with small amounts of tokens from transaction fees being burned and removed from circulation.

As a blockchain, Ethereum is also innovating remarkably with different upgrades and innovations to make its layer 2 protocols work optimally. When all these factors come together, there is a high chance that Ethereum price will break out of its current stagnant trend and stage a mega rally in the future.

Learn more: Pepe Coin missed, here are 3 Ethereum Meme coins to buy in June

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