After a shortage of supply in the exchanges for Bitcoin (BTC), this time Ethereum (ETH) reserves in the exchanges saw a big drop. The liquidity crisis began to hit Ethereum; Ethereum in the exchanges reportedly melted by 20%.
Cryptoquant CEO Ki Young Ju said that after Bitcoin, a liquidity crisis may have begun for Ethereum. Ki Young Ju, who said that apparently a shortage of reserves has begun on the sales side for ETH, announced that Ethereum reserves have decreased by 20% compared to May 2020.
ETH liquidity crisis
CryptoQuant CEO Ki Young Ju noted that the Ethereum market may be facing a liquidity shortage. Sharing data on the ETH exit on the exchanges, the CEO stressed that ether, like BTC, may soon experience a shortage of reserves.
Cryptocurrency data analytics company Glassnode has shared data to support CryptoQuant’s CEO. Daily ETH output on the exchanges reached a four-month high of 42 million 607 thousand 586 coins. Meanwhile, the number of ETH active addresses has increased by 8.3% in the last 24 hours. According to Glassnode data, ETH trading volume broke the record for the last 9 months.
Will lack of liquidity trigger Ethereum price increase?
In the last 24 hours, the leading altcoin Ethereum has raised over 100 thousand dollars to levels it has not seen since January 2018. While many analysts predicted a record for Bitcoin and Ether could follow, the ETH price showed a pullback before it managed to hit an all-time high.
Ether, which also completed Phase 0 for the Ethereum 2.0 transition this year and took an important step, launched staking activities in the ETH2 contract. Currently, about 2% of the ETH supply is connected to the Ethereum 2.0 contract. CryptoQaunt CEO Ki Young Ju said the lack of liquidity in the exchanges could push the price of Ethereum much higher in the long term.