The recent increase in institutional demand for Ethereum and the treasury company's strategy have made prices very close to the 2021 ATH.
When ETH was expected to beat the 2021 ATH, it was again postponed to another spring as macro data from the US had a negative impact on the market.
However, the analysis reveals that supply shortages have strengthened Ethereum's bullish outlook.
According to a study by Japan-based XWIN, Ethereum supply has been shrinking in the face of increasing demand recently, and as supply shrinks, ETH is entering a strong period of growth.
Saying that a large amount of ETH has been withdrawn from the exchange, the analytics company said the exchange's ETH balance has been declining sharply since the end of July.
Analysts pointed out that daily exchange withdrawals have repeatedly exceeded 100,000 ETH, with the largest withdrawal of 92,899 ETH ($412 million), leaving Kraken about a week ago.
Additionally, analysts pointed to the Spot ETH ETF's record weekly influx of $2.85 billion, saying all of these factors support the strong bull case for ETH.
“Pressures for purchasing ETFs and facilities have increased dramatically as large quantities of ETH have been withdrawn from exchanges.
Ethereum is short of supply, with current exchange balances of approximately 18.4 million.
As a result, Ethereum supply is gradually shrinking due to a decline in exchange supply and increased institutional demand.
If this trend continues for Ethereum, there is a high chance that a strong supply-straight bull market will emerge towards the end of the year. ”
Coinbase Research Director David Duon also said Ethereum's outlook is positive. He said current data suggests that demand for Ethereum continues to be strong, suggesting that the ETH Treasury is driving demand.
At this point, Duong noted that since the beginning of August, DATS has purchased a total of 795,000 ETH (worth around $3.6 billion) and has secured 2% of the total supply.
Finally, Duong highlighted that these companies could continue to make even larger Ethereum purchases and contribute to the upside.
*This is not investment advice.
