Ethereum Continues to Strengthen as Exchange Inventory Declines and Leverage Increases
Date: 2025-03-25 Author: Oliver Abernathy Categories: CRYPTO PAYMENTS
Ethereum has been showing strong growth, up 9% in the last week, while the broader market is still recovering from a correction. This move reflects both improved market sentiment and important on-chain metrics that could strengthen the asset's upward momentum.
According to the latest data, the amount of ETH stored on centralized exchanges has reached its lowest level this year, at 18.32 million coins. This is 7% lower than the peak of 19.74 million on February 2. The decline in inventory indicates that investors are increasingly withdrawing funds from exchanges, preferring to store them for the long term, participate in staking, or place capital in spot ETFs.
The decrease in the amount of ETH available on exchanges is holding back supply. With constant or growing demand, such dynamics can push the price up. This makes the reduction in exchange reserves an important indicator of possible future growth of the asset.
At the same time, there is an increase in the Estimated Leverage Ratio (ELR), which indicates the average leverage used by traders. On March 21, this indicator reached an annual peak of 0.686, after which it rolled back a little and is now again approaching the maximum, being at the level of 0.683. ELR is calculated as the ratio of open interest in an asset to its balances on the exchange. Its growth means an increase in the willingness of market participants to take risks in order to obtain greater profits.
Despite the instability, many investors continue to bet on the growth of Ethereum. This is confirmed by technical analysis: at the time of writing, ETH showed an intraday increase, and the Elder-Ray indicator (value 52.80) signals the prevalence of buying pressure - this is the maximum over the past 30 days.
If the current sentiment holds, Ethereum could continue to move higher to $2,148, and with a sustained bullish momentum, to $2,224. However, if the bearish pressure increases, a correction to $1,759 or even $1,924 is possible.
Thus, ETH is now at an important crossroads, where much will depend on the behavior of both retail traders and institutional players.
