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Leon Waidmann | Onchain Insights
@leon-waidmann
Ethereum reserves on exchanges shrink rapidly📉 Supply is drying up while the market is heavily short A short squeeze + low liquid supply could make things very interesting📈
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
At first glance, the drop in reserves is usually seen as a positive signal. However, the rationale might actually be the opposite. Considering that a significant portion of real investment demand comes from centralized exchange users, and that these exchange balances indirectly reflect interest in the asset, the fact that reserves are at all-time lows could actually indicate a decreasing demand as an investment vehicle. It's similar to the AUM of Ethereum ETFs — I don’t believe it’s a good sign when those numbers are at their lowest or trending downward
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
It's true that many people interpret the drop in ETH reserves on exchanges as bullish, based on the idea that “there’s no ETH left to sell.” But that assumes the ETH being withdrawn is going into long-term holding (staking, cold storage, DeFi), without considering why it’s no longer on exchanges in the first place. My point is point: if a large part of marginal demand —the kind that moves price in the short term— comes from investors using centralized exchanges, then a persistent drop in reserves might actually indicate: Less speculative interest Lower trading activity Fewer net inflows
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