Peter Smith
Exchange reserves just hit rock bottom while derivatives traders are loading up like crazy. This combo could send Ethereum (ETH) straight to new all-time highs.
ETH Supply Drying Up on Exchanges
Here's what matters right now: exchange reserves are the amount of ETH sitting on centralized exchanges. When reserves are high, there's more selling pressure. When they're low, supply gets tight and prices can explode on any buying surge.
On July 31, Ethereum's exchange reserves crashed to an all-time low of 18.72 million ETH.
As of August 12, they're still sitting near that level at 18.85 million ETH, even as ETH climbed toward multi-month highs. This is huge because it shows buyers are completely dominating sellers right now.
Sure, people are still selling, but the record-low exchange reserves prove buyers are snatching up everything faster than sellers can dump it. Historically, ETH struggles to rally when reserves spike. The fact that reserves stayed this low while price pushed higher shows serious spot market demand.
Ethereum (ETH) Derivatives Traders Going All-In
If spot buyers are the foundation, derivatives are the rocket fuel. Open interest (total value of futures and perpetual contracts) hit an all-time high of $29.17 billion on August 9 and is still hovering up there.
Why does this matter? High open interest creates potential for explosive moves. If ETH breaks key resistance, leveraged shorts get liquidated and trigger a squeeze that amplifies the rally. Right now, with spot supply this tight, everything points to an upside squeeze.
The combo of record-low reserves and record-high open interest means spot buyers and derivatives traders are both lined up for the same thing: a big move higher.
ETH Price Prediction: $4,468 Breakout Could Trigger New All-Time High
Technically, Ethereum is trading in an ascending triangle pattern with key resistance at $4,468 (the 2.618 Fibonacci extension). Breaking above this level puts the old all-time high of $4,878 right in reach.
If bulls clear $4,468, the next Fibonacci target sits near $4,893 - which would be a fresh record high for ETH. On the downside, immediate support is at $4,043, but given the current setup, upside looks way more likely.
Peter Smith
