Ethereum scarcity looms as exchange reserves drop
Data from CryptoQuant shows that Ether reserves on centralized exchanges are declining with numbers dropping to 8.1 million ETH. Although there are many theories behind the recent drop, Nuggets News’, Alex Saunders, pointed out that at the current rate, “exchanges will run out of ETH in 10 days.”
On January 14, Saunders noted that Ether reserves on exchanges dropped by 10% from 11 million to 10 million in 24 hours. Several hours later, he made a second tweet stating that the decline had escalated by a further 20% and that reserves on exchanges could dry up in the next 48 hours.
Exchanges will run of $ETH in 10 days at current rate. Reserves dropped 10% in 24 hours. Incredible. We all know what happened when demand outstripped supply of $BTC. It quadrupled in 90 days. Can the world computer top that? 🌐🖥️🚀 #ETH2 #DeFi #NFTs #Gaming #DAO #Scaling pic.twitter.com/QJl3Hucqno
— Alex Saunders 🇦🇺👨🔬 (@AlexSaundersAU) January 14, 2021
Exchanges could be out of $ETH within 48 hours. Demand has sky rocketed. Exchange reserves fell 20% from 10M to 8M in the last few hours. With targets of $5k, $10k & $20k long term, I doubt many HODLers will sell their ETH in the $1-2k range. 🌐🖥️👽 #ETH2 #DeFi #NFTs #Gaming #DAO pic.twitter.com/rYPOch2u7p
— Alex Saunders 🇦🇺👨🔬 (@AlexSaundersAU) January 14, 2021
Data from other research providers confirm declining reserves on centralized exchanges. Glassnode, for instance, revealed that only 7% of Ether’s circulating supply is being
held on exchanges – a low that was last seen in July 2018.
Analysts are predicting that Ethereum might retest its 2018 all-time high if its demand far outstrips the supply. For Saunders, an explosive Bull Run is on the way for Ethereum, stating that:
We all know what happened when demand outstripped supply of $BTC. It quadrupled in 90 days.
Saunders claims appear to be in line with the recent announcement from eToro notifying customers of possible limitations in buying digital assets due to surging demand. However, many people responding to Saunder’s tweet noted that the data could be broken or an exchange could be shuffling its wallets. Whilst there is a rising demand for Ethereum, the latter narrative seems to be more logical.
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