Journalist
Posted:
- The last five days have seen a dip in Coinbase’s Ethereum exchange reserve.
- According to a CryptoQuant analyst, this is typically followed by a rise in the coin’s price.
The last five days have seen a decline in Coinbase’s Ethereum [ETH] exchange reserve, pseudonymous CryptoQuant analyst Crypto Sunmoon stated in a new report.
This drop in reserves could mean that users are taking their ETH off the exchange, potentially due to the coin’s recent price consolidation amid the surge in profit-taking activity, or seeking to move their ETH elsewhere.
It could also be that some users might be transferring their ETH from Coinbase to other wallets or platforms for various reasons, like staking, DeFi participation, or self-custody.
Regardless of the reason, Sunmoon noted that this decline is a good sign for the coin’s price. According to the analyst:
“The price of Ethereum has often seen short-term gains when Coinbase ETH exchange reserve decreases.”
Sunmoon added further that the current decline in Coinbase’s ETH reserve marks the first time since the coin traded at the $1600 price level in September.
Is Ether well poised for the predicted rally?
Although market participants have stayed their hands from executing large trades due to the uncertainty around the coin’s next price direction, it has managed a 20% uptick in the last month, data from CoinMarketCap showed.
At press time, the leading altcoin traded at $2391. Price movements observed on a daily chart revealed that bearish activities may have been subdued due to the re-emergence of the bulls.
Source: ETH/USDT on TradingView
According to readings from ETH’s Directional Movement Index (DMI), its positive directional index (green) crossed above the negative directional index (red) on 26th December.
This crossover often signifies a potential for a new uptrend in the underlying asset. Whenever it occurs, it means that upward momentum is overpowering downward momentum. Since 26th December, ETH’s price has climbed by 5%.
Further, the coin’s Moving average convergence divergence (MACD) indicator confirmed the commencement of a new bull cycle. During the intraday trading session on 27th December, the MACD line intersected the trend line in an uptrend.
Read Ethereum’s [ETH] Price Prediction 2023-24
This upward intersection came after the MACD line rested below the trend line for more than a week, suggesting that the ETH market saw increased coin sell-off.
The crossover showed that the shorter-term moving average has begun to accelerate faster than the longer-term moving average. This suggests increasing bullish momentum.