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The Ethereum stock market flow is falling, what does this mean?

Data from Chinese journalist Colin Wu shows a sharp decline over the past weekend in Ethereum holdings on crypto exchange wallets.

This trend continues this week, causing some to wonder what’s going on with the second largest cryptocurrency by market capitalization?

What does the dwindling Ethereum stock market mean?

An analysis by Wu Blockchain regarding Ethereum exchange reserves shows that they have reached their lowest point in 2021 with 19.8 million ETH.

“The reserves of all ETH exchanges have continued to fall, reaching the lowest point in the last year, which stands at 19,8272 million.”

At the same time, Ethereum is showing signs of recovery. The cryptocurrency has crashed along with the rest of the market due to recent FUD news. However, the situation remains somewhat delicate until a breakthrough above the $ 2,9 k resistance confirms a reversal of the trend.

Step-by-Step: Buy Ethereum

Declining stock exchange flows are usually considered bullish sign scored, as they indicate that investors are withdrawing funds in order to store them in the long term.

With a less liquid offering on the crypto exchanges [Zum Krypto-Börsen Vergleich] should constant demand dynamics push the price up. It also suggests a less active ETH market. In the same tweet, Wu Blockchain also noted an increasing balance in the ETH 2.0 staking contract.

This would further support the bull case by further reducing supply. Currently, the ETH stored in staking is blocked until transactions are enabled in phase 2. Developers Consensys announce a vague rollout date for Phase 2 between 2021 or 2022.

The Celsius Network is already seeing a turnaround

Many see developments in Ethereum as driving investor confidence. So much so that talk of a bitcoin flipping is back on the agenda.

Speaking to Kitco News, Celsius Network CEO Alex Mashinsky said that a flippening has already taken place, at least on its platform expressed in dollars.

“The flippening has already taken place. Ethereum has already overtaken Bitcoin in terms of the total stock of the Celsius community in dollars. And I think the broader market will follow it…”

But in general, flippening refers to the fact that one project overtakes another in the valuation of market capitalization. Not on the total dollar balance held by the investors of a particular platform.

Nevertheless, Mashinsky points out that the Ethereum use case has a greater attraction in terms of yield (staking, price development) than the store of value Bitcoin. He sees this as a driving force for a possible flipping of market capitalization.

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Text credit: cryptoslate

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