Ethereum Shows Signs of Rebound as Exchange Supply Hits Record Low: Santiment
The move represents a 2% daily gain for ETH, while the total crypto market capitalization has declined by 2.4%.
Ethereum has outperformed the broader crypto market over the past 24 hours, reaching a 12-day high of $2,832 before pulling back to $2,720 in early trading on Feb. 18, according to blockchain analytics firm Santiment.
The move represents a 2% daily gain for ETH, while the total crypto market capitalization has declined by 2.4%, signaling relative strength for Ethereum.
Santiment analysts noted that Ethereum has started to show signs of a rebound, adding that it has been outpacing most altcoins to start the week.
Ethereum Gains Momentum After Months of Underperformance
The renewed momentum comes after months of underperformance relative to other large-cap cryptocurrencies.
While not a full-fledged breakout, analysts suggest that ETH could be positioning itself for a stronger market-wide recovery.
A significant on-chain metric supporting ETH’s long-term bullish case is its rapidly declining exchange supply.
According to Santiment, only 6.38% of Ethereum’s total supply remains on centralized exchanges, marking the lowest level since its inception.
This trend suggests that investors are moving ETH into cold storage, a signal that they intend to hold rather than sell.
Santiment noted that such supply movements typically reduce the likelihood of major sell-offs, making it a bullish indicator for long-term price stability.
As reported, the amount of Ether withdrawn from crypto derivatives exchanges has also surged to its highest level since August 2023, a development analysts interpret as a bullish sign for ETH’s price.
However, analysts warned that while this metric supports long-term accumulation, it should not be used as an immediate trading signal.
Despite the short-term price surge, Ethereum’s valuation against Bitcoin remains weak.
The ETH/BTC ratio improved by 7% on Feb. 17, reaching 0.029, yet it remains near its lowest levels since December 2020.
Ethereum has struggled against Bitcoin since mid-2022, as BTC continues to dominate the market in relative strength.
Market Sentiment Remains Divided
While some traders are optimistic about Ethereum’s latest move, not all are convinced that a full recovery is underway.
Crypto analyst Lark Davis dismissed the rally, joking that Ethereum pumps a few percent, only for the market to dump minutes later.
Analysts at Time To Trade also noted that ETH has failed to reclaim the $2,710 resistance level, signaling that buying pressure remains weak.
They claimed that Ethereum’s price action remains indecisive, with bearish pressure keeping it below key resistance levels. The analysts said the $2,635 support level is crucial, as a break below this could lead to further declines toward $2,500.
On the other hand, a breakout past $2,710 and eventually $2,910 would signal a shift in momentum, potentially leading ETH back into a bullish trajectory.
Earlier this month, Ethereum experienced an unprecedented level of short selling, with futures contracts on the Chicago Mercantile Exchange (CME) reaching a record high of 11,341.
The surge in bearish bets, up over 40% in just a week and 500% since last November, indicated growing pessimism about Ethereum’s short-term outlook.
