According to data from Glassnode, the Ethereum balance on exchanges has dropped to a three-year low of around 14 million ETH.
Lower exchange balances are considered a positive indicator because it indicates that people are refraining from selling their assets.
In the last week, the crypto market has seen a bleed-out, with bitcoin falling below $47,000 and ether retreating below $3,900.
A bearish season
It has now rebounded, and the low exchange balance could indicate that investors believe the worst is behind them. Since the beginning of the month, the balance has been steadily declining.
However, given how volatile the cryptocurrency market is, there is no certainty that the market would turn bullish.
In general, though, the sentiment surrounding ethereum has been fairly optimistic, as evidenced by various market participants’ analyses.
Much of the popular DeFi and NFT niches are still powered by the network, and new concepts are popping up every week.
The metaverse has been one of the hottest subjects in recent months, with rising interest from both inside and outside the industry.
Such developments are extremely encouraging for ethereum, which some believe, has the potential to overtake bitcoin as the market’s most valuable asset.
That’s a hefty order, but given the current state of ethereum, it’s not completely out of the woods.
Despite the competition, Ethereum is still thriving
Ethereum, as one of the industry’s pillars, and certainly the DeFi sector, appears to have a bright future ahead of it.
Despite the fact that numerous networks are developing infrastructure to compete with it, ethereum appears to be a powerful contender in the sector.
As the market enters 2022, the network has a lot going for it. The most notable change is the ETH 2.0 upgrade, which should fix all network scalability and performance issues. This would make DeFi and the ever-expanding metaverse more accessible.
Image courtesy of Cointelegraph News/YouTube