There is a clear accumulation dominance reflected in Ether’s (ETH) recent price action. The digital asset is currently trading slightly above $2,300, up 1.2% over the past 24 hours.
Is an Ether supply shock underway?
Recently, the number of wallets accumulating ETH – called the Accumulation Addresses – surged to 2,430 overtaking the number of wallets holding huge amounts of stablecoins, called Stable Whales, that are currently in the territory of 2,410.
The fact that ETH Accumulation Addresses have overtaken the number of Stable Whales wallets shows that the institutional market has changed its approach from the ‘waiting’ to the ‘withdrawal’ phase.
In simple words, these ETH whales don’t just have the capital ready to deploy. They are actually just executing orders and moving digital assets to cold custody avenues such as hardware wallets.
Meanwhile, the Binance User Deposit Address metric – currently at 2,314 – is the lowest figure among the three metrics that are being monitored. This is super bullish for ETH’s price structure, as it shows that the number of wallets sending ETH to exchanges to sell is much lower than those positioned to absorb liquidity.
According to a CryptoQuant analyst, ETH is currently in a price range that can be called ‘Armored Glass Floor.’ The buying pressure exerted by stablecoins is higher than the potential selling pressure by a ratio of 2.1:1.
ETH on the verge of a breakout
The analyst added that ETH’s current Confidence Index is hovering above 2.0, indicating a ‘High Conviction’ state. Essentially, ETH’s institutional market is drying up Binance’s liquidity.
Past data suggests that whenever the number of deposit addresses falls below accumulation addresses, ETH’s price tends to expand within a span of 72 hours to 120 hours.
On the contrary, there is an 8% chance of a reversal, which would require the number of Binance User Deposit Address to surge above 2,600. This would push it past the Stable Whale number, indicating mass profit-taking is taking place.
In related news, AltCoinDesk reported that ETH is showing strong bullish divergence after the digital asset’s taker buy ratio climbed to 1.03, after a long period of two years.
