According to new data from the on-chain crypto market data analytics, the supply of Ethereum in the market is depleting. The recent data has been shared and highlighted by CryptoQuant that reveals that the crypto exchange platforms are running out of the Ethereum supply for selling. The CryptoQuant analyst has taken to Twitter to post the latest updates.
The data and the metric comparison for the current year indicate that the total Ethereum supply in the market has decreased to 14%. The metric utilized to make the comparison is percentage supply on exchanges. The index in question is used to account for the amount of total Ethereum stored in all the major cryptocurrency exchange wallets that are reserved for selling.
The data from CryptoQuant shows that the supply shrinkage for Ethereum has reached an all-time low for the first time in the entire year. According to a detailed chart depicting the percentage supply on exchange metrics for the current year, CryptoQuant declares that the Ethereum supply at the beginning of 2021 was around 21%.
The experts from CryptoQuant claim that if the supply continues to deplete, it can create a supply shock in the market, and following the supply-demand dynamics, the price of Ethereum can take off. It is interesting to note that during May dropped to 18% when the Ethereum prices were at the same level as press time.
The discovery of the new COVID variant called Omicron created panic and set off a major sell-out in the cryptocurrency market. The prices of all the major cryptocurrencies, including Bitcoin, fell last week. However, CryptoQuant analysts claim that Ethereum has managed to absorb the shock and has recovered already.
The theory by technical analysis postulates that during May, when the percentage supply of exchange dropped to 18% from 21%, ETH prices were still changing hands at $4.5K. Recently, when the supply has decreased to 14%, the effect is not reflected fully on the ETH price. Experts opine that Ethereum has managed to absorb the selling shock with reduced supply, and it is once again on its way to a bullish streak. During the last week, ETH has gained 10%.