Key insights:
Decreasing ETH supply on exchanges indicates a potential market rally ahead.
Ethereum’s weekly DEX volume surged by 47%, signaling improved sentiment.
Historical trends show an average ETH price increase of 4.77%.
Ether (ETH) price rebounded above $4,000 on Monday, registering a 3.5% increase in the past 24 hours. This resurgence has generated optimism for ETH to continue its upward trajectory in October, supported by various onchain, historical, and technical data.
Decreased ETH supply on exchanges
According to Cointelegraph, the Ether supply on centralized exchanges has hit its lowest level since 2016, attributed to increasing institutional accumulation.
CryptoQuant analyst CryptoMe highlights three factors contributing to the decline in ETH reserves on exchanges:
Investors opting for self-custody;
ETH being moved to staking or other exchanges;
Transfers to new wallets.
Furthermore, total Ethereum exchange outflows are on the rise, reaching levels reminiscent of the late stages of the 2022 bear market when quantitative tightening was most intense, wrote CryptoMe in a Quicktake analysis on Saturday.
Related: Ether ETFs experience consecutive week of outflows, with $796M withdrawn amid a 10% price drop
Subsequently, the FTX crisis resulted in a substantial withdrawal of ETH tokens from exchanges.
“Is ETH on the brink of a boom?” the analyst inquired, adding:
“When demand rises, the rally begins. Diminishing reserves set the stage for that rally.”
Ethereum DEX volumes rise by 47% in a week
Positive sentiment is further reflected by a 47% increase in decentralized exchange (DEX) activity on the Ethereum network.
DEX volumes on Ethereum surged 47% over the past week to reach $33.9 billion, up from $22.9 billion previously, a trend mirrored in its layer-2 solutions like 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 notable volume trends featured a 30% increase for Maverick Protocol and a 26% rise for Uniswap compared to the prior week.
Historically, increasing DEX volume on Ethereum has aligned with price growth amid rising on-chain demand for ETH. For instance, ETH’s price nearly doubled during a 276% increase in weekly DEX volume that peaked at $40 billion between June 30 and August 14.
Will Ether price “pump” in October?
ETH/USD faced a 6% decline in September, which correlates with historical price trends, according to data from CoinGlass.
However, October typically sees average gains of 4.77%, suggesting a potential rise in ETH price closer to $4,300 from current levels.
“Ethereum monthly returns (USD history) reveal a clear trend indicating that October and subsequent months are bullish,” crypto analyst Marzell noted in an X post last week, adding:
“October often serves as the ignition… prepare for the Q4 $ETH pump!”
Another analyst, Midas, also predicted a robust Q4 based on past performance.
“ETH appears to be mirroring the Q3 2020 pattern,” Midas remarked in a Monday X post, noting that the last occurrence of this pattern preceded more than 100% gains in Q4.
This article does not constitute investment advice or recommendations. All investments and trading decisions carry risk, and readers are encouraged to conduct their own research.
