While Bitcoin remains the market leader, Ethereum is often the first to come to mind when considering altcoins. After a significant recovery from last year’s drop below $1,000, Ethereum appears to be emerging from Solana‘s shadow. A recent report by CryptoQuant analyst Crypto Sunmoon highlighted a decrease in Ethereum reserves on Coinbase over the past five days.
This decline in reserves could indicate that investors are withdrawing their ETH from exchanges to realize profits following a period of price consolidation or possibly transferring their ETH for other reasons such as staking, DeFi participation, or simply to hold in private wallets.
Regardless of the reason, the analyst suggests that the reduction in exchange reserves could be a positive sign for Ethereum’s price, which historically tends to experience short-term gains following such a decrease. Sunmoon also noted that this is the first time since September, when Ethereum was priced at $1,600, that such a decrease in Coinbase ETH reserves has occurred.
Despite market participants’ hesitation due to uncertainty in Ethereum’s next price direction, a 20% increase was observed last month. At the time of writing, the leading altcoin was trading at $2,391. Daily chart movements suggest that the bulls might be re-entering the market, potentially suppressing downward trends.
Ethereum’s Directional Movement Index (DMI) values indicate a possible new uptrend as the positive index (blue) overtook the negative index (orange) on December 26. This crossover typically signals the potential for a new rise in the asset being analyzed. Since that date, Ethereum’s price has increased by 5%.
Furthermore, Ethereum’s Moving Average Convergence Divergence (MACD) points to a new bull run. The MACD line intersected with the bullish trend line on December 27, suggesting a positive market momentum.