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Ethereum reserves fall to 6-year lows – What this means for ETH’s bull run
With XRP gaining and Bitcoin confidence wavering, the road to a bull run is uncertain.
In a recent development, Ethereum’s spot exchange reserves have plummeted to a six-year low of 8.1 million ETH. Despite the decline, it’s essential to note that there has been a slight increase in reserves by 0.62% in January, which could be interpreted as a sign of renewed buying interest.
However, this decrease in Ethereum reserves may not be enough to trigger a major bull run. The current performance of Ethereum against Bitcoin remains weak, with the ETH/BTC pair forming lower lows. Even when the RSI showed extreme overbought levels, the lack of capital inflow into Ethereum seemed to hinder its growth.
Moreover, Ethereum’s market value has decreased by more than half since its election day opening price. This decline could be attributed to profit-taking from HODLers. In order for a new rally to take shape, Ethereum will likely need a broader market shift.
Without this, there is a possibility of another 10.75 million addresses turning red, putting $19 billion worth of ETH at risk of a massive sell-off.
On the brighter side, the six-year low in reserves could signal a shift towards long-term holding by investors. However, this does not guarantee a major bull run, especially considering January’s underwhelming performance despite Bitcoin gaining 9%.
Furthermore, it’s important to note that Bitcoin investors are losing confidence in adding ETH to their portfolios. Meanwhile, XRP is capitalizing on the opportunity and surpassing Ethereum in the process.
In conclusion, while the decline in Ethereum reserves may be a sign of renewed buying interest, it is not guaranteed to spark a major bull run.
Source: ambcrypto.com
