CryptoMe
๐ฅIs ETH About to Boom? Reserves Are Dropping! So Whatโs the Missing Piece?
SUPPLY on SPOT EXCHANGES is going down. What can be the reasons? 1-For SELF CUSTODY/STAKING, INVESTORS move their OLD ETHEREUM off exchanges. This is not a new buy, so price may not rise. 2-There are NEW BUYS. For SELF CUSTODY/STAKING, people withdraw right after buying. This can push price up. 3- Exchange creates a NEW WALLET; until ON-CHAIN tools label it, flows may look like withdrawals, but this is a rare case. I'll follow reason-2 as the base view: INVESTORS BUY ETHEREUM and MOVE IT TO PERSONAL WALLETS At images below: at points 1-2-3 there is ETH outflow from SPOT exchanges. What were the story behind these outflows? 1๏ธโฃNETWORK CONGESTION and high GAS FEE! Then UNI AIRDROPS, and easing macro policy CREATES A DEMAND and strong bull run. 2๏ธโฃLate BEAR phase, QT in MACRO was at the hottest point. Then FTX crisis & BANK RUN happened; outflows were mainly old coins leaving. Later, relatively better macro data brought DEMAND and ETH went up. 3๏ธโฃCURRENT situation. COMMON PATTERN: In these periods, even with big reserve drops, the price stays flat. There is buying, but there is also selling; sales absorb the buys, so price does not rise. Later, when DEMAND triggers, the rally starts. Falling reserves prepare the ground for that rally. Now ETH is leaving, RESERVES and SELL-SIDE LIQUIDITY falls. This shows TRUST in ETH and hope for the future. The missing piece is DEMAND. This is NOT a SUPPLY SHOCK; that word means something else in FINANCE. It only shows lower reserves on SPOT exchanges. So we must ask: โWILL DEMAND COME, WILL DEMAND INCREASE?โ If no RECESSION/STAGFLATION shock appears, and if policy trends (RATE CUTS, slower QT, rising velocity of GLOBAL M2) continue, I am LONG-TERM BULLISH on ETHEREUM. During all this time, price will swing. If price falls below the ACCUMULATING WHALESโ REALIZED PRICE (3rd image), it will be BUY/ACCUMULATE opportunity. We followed this metric before; when price dropped below it, we bought in steps. The Result: SUCCESS!