Key Takeaways

Ethereum’s supply on exchanges has sharply declined, with the same hitting its pre-June levels. Whales and institutions have been aggressively accumulating ETH, scooping up $448.92 worth of ETH.

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Since hitting a local high of $4.6k a week ago, Ethereum [ETH] has traded within a parallel consolidation range of $4.2k to $4.5k.

At the time of writing, the altcoin was trading at $4.408, after moderate gains of $0.44% in just 24 hours. As expected, some investors have taken the opportunity to accumulate in the middle of the market’s slowdown. 

A fall in Ethereum supply on Binance!

According to CryptoQuant’s Arab Chain, the Ethereum Exchange Supply Ratio on Binance fell sharply from 0.041 to 0.037 within just two weeks. 

Typically, such a fall in the exchange supply ratio implies that investors on Binance are aggressively accumulating ETH. Thanks to the latest dip, the ESR reached its pre-June levels, indicating that the market may have flushed out all previous profit-taking activity. 

Historically, a declining ESR has preceded significant upside on the charts. Especially since a fall in exchange liquidity limits sellers’ ability to push the price down. Therefore, if the ESR continues to fall without a corresponding drop in price, the market could be entering a new institutional-led bull cycle. 

Whales lead the charge…

Significantly, on the back of a declining Exchange Supply Ratio, whales and institutions have been aggressively accumulating too. 

According to On-chain Lens, whales and institutions acquired $448.92M in ETH. Among these buyers was Bitmine, with the firm buying 69,603 ETH worth $300M from BitGo and Galaxy Digital.

At the same time, another three whale wallets acquired 12,692 ETH worth $54.84M, 18,404 ETH worth $79.45M, and 3,388 ETH worth $14.63M. Thanks to these purchases, Ethereum recorded a negative Exchange Netflow for seven consecutive days, with 05 September emerging as an exception. 

Usually, when whales and institutions turn to aggressive accumulation, it is a sign of firm conviction in the market – A clear bullish sign. 

A look at the derivates market

With demand stabilizing, investors have started to jump into the derivatives market for strategic positioning.

In fact, according to CryptoQuant, the Derivatives Taker Buy Sell Ratio turned positive after being negative over the previous week. 

When this metric turns positive, it means buyers are more aggressive than sellers – A sign of short-term bullish momentum.

A positive funding rate seemed to further validate this bullish momentum. Whenever this metric rises in tandem, it means that investors are mostly bullish and taking long positions. 

What do the mometum indicators say?

Finally, according to AMBCrypto’s analysis, Ethereum’s price found stability as whales and institutions continued their accumulation spree.

Thanks to the same, the altcoin’s momentum recovered somewhat on the charts. In fact, the Stochastic RSI jumped to 13 after a bullish crossover.

Likewise, its Relative Vigor Index (RVGI) made a bullish crossover, hitting -0.1117, further validating the strength of the uptrend.

Usually, when these indicators act in such a way, they indicate that buyers are dominating the market and the uptrend could continue.

If buyers and vast entities continue to accumulate, ETH will break out of the consolidation mould and breach $4.6k. Following the same, it might also reclaim $4.8k.

Conversely, if momentum fades again and selling from large entities resumes, ETH will drop to $4.2k.

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