Ethereum is showing signs of a potential rebound as investors withdraw ETH from exchanges at an unprecedented rate. The shift in market sentiment has led to a surge in Ethereum’s price, outperforming most altcoins in early-week trading. While the broader cryptocurrency market remains volatile, analysts are closely monitoring Ethereum’s exchange supply and investor sentiment as indicators of a potential sustained recovery.
Ethereum briefly surged to a 12-day high of $2,832 on February 17 before retreating to $2,720 in early trading the following day. Despite the pullback, ETH has gained 2% in the past 24 hours, a stark contrast to the wider crypto market’s 2.4% decline in total capitalization. According to the on-chain analytics platform Santiment, Ethereum’s recent performance is notable, given its lackluster showing relative to other large-cap assets in 2024.
A key factor contributing to Ethereum’s resilience is the ongoing movement of ETH from centralized exchanges to cold wallets. Santiment analysts highlighted that only 6.38% of Ethereum’s circulating supply remains on exchanges, marking the lowest level since the cryptocurrency’s inception. Typically, such trends indicate that investors are opting to hold onto their assets rather than sell, reducing the likelihood of a major sell-off.
According to Santiment analysts:
“When crypto assets move off centralized exchanges, it is usually a signal that investors are holding. It decreases the probability of a major upcoming sell-off. But it should be considered a long-term metric, rather than one to react to on a swing trading basis,”
Growing Interest in Ethereum and Market-Wide Implications
Investor sentiment around Ethereum appears to be shifting, with renewed interest emerging in February. Santiment observed that after underperforming compared to other top-tier cryptocurrencies for much of the year, Ethereum’s rebound could gain momentum as broader market recoveries unfold.
Despite these positive signs, skepticism remains. Crypto YouTuber Lark Davis remarked, “Ethereum pumps a few percent, and then markets dump five minutes later,” casting doubt on the sustainability of the rally. Nevertheless, Ethereum’s improving fundamentals have influenced key metrics such as the ETH/BTC ratio, which increased by 7% on February 17 to reach 0.029. While this marks a slight recovery, the ratio remains near multi-year lows, reflecting Ethereum’s continued struggle to keep pace with Bitcoin since mid-2022.
