Ethereum Supply At 28-Month Lows; Prices Could Push Higher Soon

Summary:

Ethereum prices could be in the way higher as supply on exchanges drops to 28-month lows, according to on-chain data provider Santiment.

Reports indicate that Ethereum exchange supplies are currently at 28-month lows, as investors snap up the asset at a rapid pace. On-chain data provider Santiment reports that the supply of Ethereum tokens on exchanges is now below 19%; the first time it has happened since December 2018.

Etheruem is highly sought after for DeFi projects, Ethereum 2.0 staking and also for storage by investors who are projecting much higher prices for the world’s second most capitalized cryptocurrency.

Ethereum has delivered returns of more than 150% in 2021, and increasing institutional interest in the token could push prices much higher if the trend continues. with 1711.45 and 1550.90 serving as additional downside targets.

Technical Outlook for ETH/USD

Ethereum’s pairing with the US Dollar features a potentially bullish pattern on the daily chart: the bullish flag. If price breaks out of the flag, this move will also take out the all-time high at 2151.63, opening the pathway towards the 161.8% Fibonacci extension at 2311.92. The measured move could potentially target 2625.91 (200% Fibonacci extension from the swing low of 12 December 2020 to the swing high of 10 January 2021.

On the other hand, a breakdown of the flag’s lower border invalidates this pattern and extends the correction towards the 1800 psychological support initially (100% Fibonacci extension), with 1711.45 and 1550.90 serving as additional downside targets.