Why The Ethereum Price Rise Is Not A Cause For Celebration Yet
The recent clash between Binance, Coinbase, and the US Stock Exchange Commission has had a major impact on the cryptocurrency industry, causing widespread turmoil. One notable consequence was the significant reduction in the availability of Bitcoin (BTC) and Ethereum (ETH) on the Binance platform, indicating a loss of investor confidence in a centralized exchange (CEX).
A tweet from Glassnode shed light on the aftermath of the SEC incident, revealing that investors have been actively withdrawing their ETH and BTC from Binance. The tweet revealed that the Ethereum balance on the platform had shrunk from around 4.56 million to 4.2 million, signaling a lack of trust in CEX. To protect their holdings, investors are starting to shift their assets to self-custody options or decentralized exchanges (DEXs), a trend that is visible from the data provided by Dune.
Following the decline, the volume of ETH traded on DEX has increased significantly. DEX ETH volumes have shown an upward trajectory across projects, including Curve (CRV) and Uniswap (UNI), since June 11. Interestingly, Ethereum emerged as the top revenue earner in the first quarter, driven by its extensive usage and fuel costs. A recent tweet by Messari revealed that Ethereum revenue was a staggering $457 million, almost 2.8 times higher than the combined revenue of all the other flagship layer-one blockchains.
However, the second quarter of this year presents a different picture. Data from Token Terminal shows a decline in ETH earnings. After the spike on May 5, Ethereum’s revenue plummeted, raising concerns about the health of the blockchain network as a whole. Despite the drop in earnings, the price of ETH is moving in the opposite direction. According to CoinMarketCap, the price of ETH witnessed a nearly 2% rise in the last 24 hours and is currently trading at $1,665.31, with a market capitalization exceeding $200 billion.
CryptoQuant analysis shows that Ethereum’s Relative Strength Index (RSI) indicates an oversold position, potentially increasing buying pressure and the price of the token. Moreover, Ethereum exchange reserves remain healthy, implying there is no significant selling pressure on the token. A quick glance at ETH’s daily chart hints at a continuation of the uptrend, as market indicators support the bulls. The Moving Average Convergence Divergence (MACD) displays a bullish signal on the market.
On the other hand, Ethereum’s Chaikin Money Flow (CMF) is showing minor losses, and the Exponential Moving Average Band (EMA) shows that the bears are exerting influence, given that the 20-day EMA remains below the 55-day EMA.
