Crypto Investors Withdraw $3 Billion Worth Ethereum off Exchanges Since ETF Approval—Rally Inbound?

Key Insights

• Investors are pulling billions of dollars worth of Ethereum off exchanges. This indicates that they expect the price to rise.

• The recent approval of Ethereum ETFs likely triggered the 30% price increase before the official approval.

• Historically, investors moving crypto off exchanges show a bullish outlook and could influence a rally.

• Despite the short-term consolidation, the bulls are actively defending the $3,700 price point, and Ethereum might not break below after all.

The U.S. Securities and Exchange Commission gave the green light to eight spot Ethereum ETFs recently, and a lot has changed before and since.

A week before the final approval of these ETFs on 23 May, Ethereum rallied by a staggering 30%. The cryptocurrency broke above the $3,200 and $3,500 resistances nearly overnight, before hitting a local high of $3,970.

This time around, we have seen some decline in the cryptocurrency, which has brought it into a retest of the $3,700 zone.

However, instead of the bearish takeover that would normally result from this, Ethereum investors have been observed pulling billions of $ETH off exchanges, in hopes of further bullish price action.

Here are all the reasons why the real Ethereum rally has barely started.

$3 Billion Worth of ETH on the Move

This trend was highlighted by analyst, Ali Martinez in a recent tweet.

According to the analyst, since the SEC’s approval of the Ethereum ETFs in late May, around 777,000 ETH (which is equal to a staggering $3 billion) has been pulled off crypto exchanges.

Investors depositing their crypto into exchanges is generally a bearish sign that indicates massive selling.

On the flip side, investors pulling their crypto off exchanges is a massively bullish sign that could indicate a positive switch in sentiment.

The Glassnode chart attached to Ali’s tweet shows that the general exchange balance dropped from around $14.5 billion to a little more than $12.4 billion, which has also had an almost direct correlation with Ethereum’s rallies

The Ethereum ETF Effect

Experts generally believe that the Ethereum ETFs will have a massive effect on the price of Ethereum.

And for all intents, they may not be wrong.

Recall that Ethereum started to rally almost a week before the ETFs were finally approved.

This rally took Ethereum up by a staggering 30% within a week and happened around the time when Bloomberg senior ETF analysts, Eric Balchunas and James Seyffart bumped up their approval odds from a mere 25% to 75%.

Ali also reported, right around this time, that the Ethereum whales bought around 110,000 ETH (worth $341 million) within the week of the ETF approvals on 23 May.

This creates a positive correlation of sorts, between the price of Ethereum and the behaviour of its whales.

Ethereum’s Price Action

According to the charts today, Ethereum trades at around $3,754.12, at the time of writing, after increasing by around 0.7% in the last 24 hours,

According to the chart above, we can see that the bulls are clearly active around the $3,700 zone above, and have been preventing a break below since 21 May.

The massive exchange outflows on Ethereum also contribute to this bullish outlook, indicating that the cryptocurrency is unlikely to break below this crucial $3,700 support.

With this being said, Ethereum's RSI shows that it is currently in bullish territory, despite the short-term bearish influence. This means that the cryptocurrency is set to make another attempt at the $4,000 very soon, as long as a break below $3,700 doesn't occur.

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