Key takeaways:
A decrease in ETH supply on exchanges suggests a possible upcoming rally.
Ethereum’s weekly DEX volume surged by 47%, indicating a more positive sentiment.
Historical analysis shows an average ETH price increase of 4.77%.
On Monday, Ether (ETH) price rose above $4,000, climbing 3.5% in the past 24 hours. This recovery has raised expectations for ETH to continue its upward trend in October, supported by various on-chain, historical, and technical metrics.
Decreasing ETH supply on exchanges
According to Cointelegraph, ETH supply on centralized exchanges has reached its lowest since 2016, spurred by increased institutional purchases.
CryptoQuant analyst CryptoMe highlights three factors contributing to the drop in ETH reserves on exchanges:
Withdrawals for self-custody;
Moving ETH to staking or different exchanges;
Transfers to new wallets.
Total Ethereum outflows from exchanges are also increasing and are now comparable to levels observed during late 2022’s bear market phase when quantitative tightening was at its peak, wrote CryptoMe in a Quicktake analysis on Saturday.
Related: Ether ETFs experience a week of outflows, with $796M withdrawn as prices fall 10%
Subsequently, the FTX crisis led to a substantial amount of ETH being withdrawn from exchanges.
“Is ETH on the verge of a boom?” the analyst queried, adding:
“When demand rises, the rally begins. Decreasing reserves set the stage for that rally.”
Ethereum DEX volumes increased by 47% in a week
A positive sentiment is also mirrored in a 47% weekly increase in decentralized exchange (DEX) activity within the Ethereum network.
DEX volumes on Ethereum rose 47% over the past week, reaching $33.9 billion, up from $22.9 billion the previous week, a trend also observed in layer-2 solutions such as Base, Arbitrum, and Polygon.
The market recovery was modest among Ethereum’s competitors, with Solana’s DEX activity rising by 6% and BNB’s by 8.3%.
Ethereum’s positive volume activity includes a 30% increase for Maverick Protocol and a 26% rise for Uniswap compared to the prior week.
Historical data indicates that increased DEX volumes on Ethereum have often coincided with price growth, driven by rising on-chain demand for ETH. For instance, the ETH price nearly doubled during a period when weekly DEX volume soared by 276% to record highs of $40 billion between June 30 and August 14.
Will Ether’s price see a “pump” in October?
ETH/USD experienced a 6% drop in September, which aligns with historical price trends, according to data from monitoring platform CoinGlass.
October, however, traditionally averages a 4.77% gain, suggesting that ETH prices could rise toward $4,300 from current levels.
“Ethereum’s historical monthly returns show a clear pattern that October and beyond tends to be bullish,” crypto analyst Marzell stated in an X post last week, adding:
“October often serves as a catalyst… prepare for the Q4 $ETH surge!”
Another analyst, Midas, similarly predicts a very bullish Q4 based on historical trends.
“ETH is mirroring the Q3 2020 pattern,” Midas remarked in an X post on Monday, noting that the last occurrence of such performance led to gains exceeding 100% in Q4.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
