⛓️Block On Chain 009⛓️
November 1-7. MOONvember🌕🚀
Good Evening Investors,
Another exciting week in crypto with a continued rally in price for Ethereum! Ethereum was able to top new ATHs at US$4660 ending the week just under $4600.
This week was a mix of news events with the most notable one being the US FOMC meeting shaking up markets mid-week. FOMC discloses the federal reserves current monetary policy outlook which often effects equity and foreign exchange markets. The meeting signaled for reduced inflation causing for an immediate market reaction in mostly ‘risk on’ markets - crypto included.
This announcement incited a -4% price drop which was quickly bought up. In my opinion this price movement was a clear form of manipulation to squeeze out leveraged longs as price rallied back up to prices previous in a matter of MINUTES - overall not concerned.
Ethereum’s price was largely unaffected during this announcement. Ethereum’s stand alone macro environment continues to prove bullish. In my opinion, a look at ETH/USD price today shows the inefficiencies of the market in terms of capital allocation. Ethereum charted along side the 2017 Bitcoin bull run is astonishingly similar. With a similar network effect and protocol maturity, it would appear that Ether is shaping up to mimic Bitcoin’s 2017 run. History doesn’t always repeat but it often rhymes - bullish.
A new ATH this week was followed up with some very bullish on-chain data suggesting for a continuation in price appreciation for Ethereum. This week we saw some very bullish metrics in regards to exchange withdrawals and accumulation.
Firstly, a look at Exchange Net Position Change says a lot. During the run up to ATHs, we saw an increased spike in exchange withdrawals. This increased withdrawal aggression from market participants signals that there is an expectation for a continuation in price appreciation - even whilst price is reaching ATHs. We can also note previous periods of increased withdrawal behavior. These periods of increased withdrawals were often led by large price expansions for Ether. I’ll will be keeping an eye on this in the coming weeks - thus far, very bullish.
Into the more nitty gritty of exchange balances, Percent Balance on Exchanges is still in a down trend continuation. In fact, Ethereum’s balance on exchange is nearing only 12.1%. This means that there is only ~12% of Ether available to be purchased from exchanges - doesn’t sound like there’s a lot of Ether left.
When considering both of these metrics it proves to be very bullish for future price. We can see visibly see in increase in demand as investors are continually increasing their withdrawals from exchange. On the other side, we can see that this demand is being met with a reducing supply. Less supply, more demand - Bullish.
Through out the week Ethereum was able to reach ATHs on a more or less independent run up. This price appreciation is something that we have been anticipating for weeks and is likely to continue. On-chain clearly shows investors are anticipating a move up by removing supply off of exchanges. This in turn is positive for price as it creates a tilt in Supply and Demand; less supply, more demand - Bullish.
When examining the market leader, Bitcoin, it is clear that the fundamentals are lining up in tandem. Bitcoin has reached significant milestones when looking on-chain. An expected move up in the short-medium term1 is also expected.
Time frame of 1 Day - 2 Weeks