Ether’s balance is increasing and this suggests that traders are betting on the asset and the ecosystem around it.
Ether’s balance on exchanges finally starts to rise, after months of fallingNOTICS
After falling for most of the year, Ether’s (ETH) balance in centralised exchanges began to increase this month, according to data from Glassnode and IntoTheBlock.
Bitcoin and ETH recorded sharp declines in their foreign exchange Crypto Legacy balances this year as confidence in institutions fell and more investors withdrew their assets to hodl in the long term, in the case of Ether, certainly in anticipation of the ETH 2.0 update. However, from mid-December onwards, the number of ETHs in exchanges has risen again. Just after the successful launch of ETH 2.0.
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While this may be seen as a casualty for ETH (since it may indicate intent to sell), there is an alternative explanation for this increase. Most of the increase in the Ether’s foreign exchange balance occurred at Bitfinex, which launched loans to BTC and ETH on December 18. This may be driving the secondary market around the Ether. This movement of increased flow to exchanges was also detected by IntoTheBlock.
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Bitfinex as a catalyst for this process
Indeed, the increase can probably be explained by investors using Bitfinex Borrow to lend ETH, an interpretation that is supported by a similar increase in the number of Bitcoins in Bitfinex at the same time. This implies that investors are taking long positions rather than preparing to sell, which is a bullish signal for ETH.
The price of Ether (ETH) surpassed the US$ 730 mark for the first time since May 2018. There are two main factors behind ETH’s strong recovery: the hype around the tokens/DeFi market and the WEC Ethereum futures listing in January 2021 after three years of waiting.