Ethereum Price Outlook: Could Exceed $3,500 as Exchange Reserves Plummet
The price movement of ETH compared to BTC since the November low has shown an increasing preference for Ethereum’s native coin. At the time of writing, the price of ETH is trading at $3,075, up over 16% from the November low.
Meanwhile, the price of Bitcoin has only risen by more than 9% from the November bottom. The outstanding growth of ETH somewhat reflects the continuous decline in the amount of ETH on exchanges.
Between December 9 and December 14, approximately 248,711 ETH were withdrawn from exchanges, equivalent to over $766 million at current prices.
The sharp decline in ETH reserves on exchanges indicates that investors are moving assets to personal wallets, an action often associated with long-term accumulation strategies.
Combining the reduction in ETH reserves and the optimistic sentiment from whales, the market expects ETH to soon face a supply shortage.
Last week, ETH reached a peak of $3,477 due to strong upward momentum. If demand continues to hold and the amount of ETH withdrawn from exchanges increases, the price of ETH could easily surpass $3,500 under favorable macro conditions.
However, the downtrend in the second half of the week may also be a sign of anxiety ahead of the upcoming interest rate decision by the Bank of Japan (BOJ).
