Recently increasing institutional demand for Ethereum and treasury company strategy brought the price very close to the 2021 ATH.
While it was said that ETH would break the 2021 ATH, the negative impact of macro data from the US on the market has postponed it to another time.
However, an analysis revealed that Ethereum's bullish outlook has strengthened due to supply constraints.
XWIN Research, based in Japan, stated that in response to the recent increase in demand for Ethereum, supply has tightened, and as the supply decreases, ETH has entered a strong upward trend.
The analysis company noted that a large amount of ETH has been withdrawn from exchanges, and ETH balances on exchanges have seen a sharp decline since the end of July.
At this point, analysts noted that daily exchange withdrawals have repeatedly exceeded 100,000 ETH, with the largest withdrawal being approximately 92,899 ETH ($412 million) withdrawn from Kraken about a week ago.
Analysts noted that in addition, spot ETH ETFs have recorded a weekly record inflow of $2.85 billion, stating that all these factors support a strong bull for ETH.
As large amounts of ETH are withdrawn from exchanges, ETF and institutional buying pressure is significantly increasing.
The supply of Ethereum is decreasing, and the current exchange balance is only about 18.4 million.
As a result, the supply of Ethereum is increasingly tightening due to the decrease in exchange supply and the increase in institutional demand.
If this trend in Ethereum continues, there is a high likelihood of a strong bull market triggered by supply constraints towards the end of the year.
Coinbase Research President David Duong also stated that the outlook for Ethereum is positive. He indicated that current data shows that demand for Ethereum continues to remain strong, and that ETH demand is being boosted by treasury companies.
At this point, Duong noted that since the beginning of August, the total of 795,000 ETH (approximately worth $3.6 billion) has been purchased by DATs, securing 2% of the total supply.
Finally, Duong emphasized that these companies may continue to make large-scale additional Ethereum purchases going forward and contribute to the bullish trend.
Stay tuned for the latest developments
