Bitcoin and Ethereum Poised for Bull Run as Exchange Supplies Dwindle

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The landscape in the realm of cryptocurrencies is shifting, recent data indicates. Bitcoin (BTC) and Ethereum (ETH), the two crypto giants by market capitalization, may be on the brink of significant upward momentum. Their supplies on exchanges have dramatically dwindled, hinting at an impending supply squeeze.

Glassnode’s data, shared by BTC ECHO analyst, Leon Waidmann, reveal exchange balances for both Bitcoin and Ethereum are at their lowest in years. Bitcoin’s supply on exchanges has shrunk to 11.6% and Ethereum’s to 10.6%, suggesting that crypto whales are in a phase of amassing these tokens, shifting their assets to self-custody.

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Waidmann emphasizes the gravity of this development, foretelling an imminent supply squeeze. Such a squeeze could propel the prices of Bitcoin and Ethereum, given that the majority of investors appear to be hoarding rather than offloading their holdings. Riding on this tide, Waidmann encouraged the anticipatory enthusiasm of a ‘next big move.’

Intriguingly, Ali Martinez, a crypto analyst, pointed out that this shift might have been kick-started following the approval of the Spot Ethereum Exchange-Traded Funds (ETFs). He revealed in a recent social media post that nearly 777,000 ETH (approximately $3 billion) were withdrawn from crypto exchanges in the wake of the Securities and Exchange Commission (SEC) authorizing these funds.

Upon their launch, the Spot Ethereum ETFs are predicted to thrust the bull run into top gear. It comes as no surprise, then, that these crypto whales might be maneuvering for prime positioning in advance of this event. Eric Balchunas, an analyst from Bloomberg, forecasted that these funds would probably commence trading by July.

However, a word of caution has been issued by research firm Kaiko. Instant soaring to new all-time highs for Ethereum’s price may be a far-fetched dream due to the potential outflows from Grayscale’s Spot Ethereum ETF. This is based on the $6.5 billion outflows recorded by Grayscale’s Spot Bitcoin ETF in its initial month of trading, which subsequently triggered a substantial plunge in Bitcoin’s price.

Despite these warnings, crypto analyst Michael Nadeau remains optimistic. Ethereum might still achieve a new all-time peak at a faster pace than Bitcoin did post the launch of the Spot Bitcoin ETFs. He mentioned that Ethereum does not witness the same level of “structure selling” that Bitcoin does since ETH validators are not obliged to sell their holdings to cover operating costs, unlike Bitcoin miners.

Nadeau spotlighted the fact that 38% of Ethereum’s supply is locked on-chain and proclaimed that “ETH is more reflexive than BTC.” He elaborated on this reflexivity feature, applauding Ethereum’s leadership in on-chain activity, leading to more ETH getting burned. Given this, the outflows from Grayscale might not hamper Ethereum’s price as they did with Bitcoin’s price. This could potentially pave the way for the second-largest crypto token to achieve a new all-time high in record time.