Key takeaways:
Decreasing ETH supply on exchanges hints at a potential price rally.
Ethereum’s weekly DEX trading volume surged 47%, pointing to better market sentiment.
Historically, ETH price typically rises by 4.77% on average.
Ether (ETH) traded back over $4,000 on Monday, following a 3.5% increase in the past 24 hours. This rebound has fueled expectations of ETH resuming its upward trend in October, supported by various onchain, historical, and technical indicators.
Decreasing ETH supply on exchanges
As reported by Cointelegraph, the amount of Ether on centralized exchanges has hit its lowest level since 2016, largely due to increasing institutional investments.
CryptoQuant analyst CryptoMe highlights three primary reasons for the decline in ETH reserves on exchanges:
Investors are opting for self-custody;
ETH is being moved to staking or other exchanges;
Tokens are being transferred to new wallets.
Total outflows from Ethereum exchanges are also increasing. These outflows are now at levels reminiscent of the last phases of the 2022 bear market when quantitative tightening peaked, noted CryptoMe in a recent analysis.
Related: Ether ETFs experience consecutive week of outflows, with $796M withdrawn as price falls by 10%
Subsequently, the FTX crisis resulted in a substantial withdrawal of ETH tokens from exchanges.
“Is ETH poised for a surge?” the analyst posited, stating:
“When demand ignites, the rally begins. Decreasing reserves lay the groundwork for such a rally.”
Ethereum DEX volumes increase by 47% in one week
Optimistic sentiment is mirrored in the 47% weekly increase in decentralized exchange (DEX) activity on the Ethereum network.
DEX volumes on Ethereum escalated by 47% over the last week, reaching $33.9 billion, up from $22.9 billion the previous week. This trend is also evident in its layer-2 solutions like Base, Arbitrum, and Polygon.
The market recovery in ETH’s competitors was moderate, with Solana’s DEX activity rising by 6% and BNB’s by 8.3%.
Ethereum’s positive volume trends feature a 30% increase for Maverick Protocol and a 26% rise for Uniswap compared to the prior week.
Historically, an increase in DEX volume on Ethereum has coincided with price growth due to rising onchain demand for ETH. For instance, ETH nearly doubled during a 276% spike in weekly DEX volume to $40 billion from June 30 to August 14.
Will Ether’s price see a surge in October?
ETH/USD dropped by 6% in September, which aligns with historical price trends, according to data from tracking resource CoinGlass.
However, October tends to average gains of 4.77%, suggesting that ETH price could approach $4,300 from current levels.
“Ethereum’s monthly returns (USD history indicate a clear trend that October and following months are usually bullish,” crypto analyst Marzell stated in an X post last week, adding:
“October often serves as the spark… prepare for the Q4 $ETH increase!”
Analyst Midas also anticipates a strongly bullish Q4 based on previous performance.
“ETH appears to be following the same pattern as Q3 2020,” Midas observed in an X post on Monday, noting that the last time of such performance was succeeded by over 100% gains 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.
