Ethereum, Not Afraid of $100 Million Sell-Off Bomb... 'Exchange Holdings Lowest Since 2016'

▲ Ethereum (ETH)/AI Generated Image

Ethereum (ETH) is simultaneously showing strong rebound signals across various on-chain indicators, despite concerns about selling pressure due to large institutional movements. The decrease in exchange holdings combined with an increase in network activity indicates a rapidly changing market structure.

FXStreet reported on April 28 (local time) that Galaxy Digital transferred approximately 45,000 ETH, valued at about $100 million, to Binance, Bybit, and OKX. Typically, large exchange deposits are interpreted as a signal of increased selling potential, and indeed, following this news, Ethereum's price dropped by about 4%, falling to the $2,288 level. However, it is also suggested that this movement could simply be processing client orders.

On-chain data shows a completely different trend. According to CryptoQuant, Ethereum holdings on exchanges have decreased to approximately 14.5 million ETH, the lowest level since 2016. Notably, the amount withdrawn from exchanges since April 19 totals 331,000 ETH, significantly exceeding recent deposit volumes. A reduction in exchange supply acts as a structural factor that maximizes upward price pressure when buying interest flows in.

Network activity is also showing strong expansion. Ethereum's 100-day average of active addresses has surpassed an all-time high of approximately 587,000. This signifies a genuine increase in users and expanded ecosystem utilization, leading to the assessment that the current price trend is decoupled from on-chain fundamentals.

Institutional investor buying continues as well. BitMine purchased 101,901 ETH in the past week, marking its largest weekly purchase this year. Concurrently, the US Ethereum spot ETF market has seen net inflows for three consecutive weeks, indicating sustained institutional capital inflow. This simultaneous increase in demand and decrease in supply is rapidly absorbing the circulating supply in the market.

Investor sentiment is also shifting towards recovery. The Fear & Greed Index has risen from 12 a month ago to 47 currently, approaching the neutral zone. The approximately $6 billion in stablecoins flowing into Binance between March and April indicates that capital is waiting to enter the market. Ethereum is increasing its potential to enter a new bullish phase within a structure of shrinking supply and expanding demand.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*