Ethereum exchange reserve shoots up by 163K ETH amid mixed signals across on-chain indicators

• Ethereum's exchange reserve increased by 163K ETH in the past five days.
• Ethereum has added over 4 million new holders in the past three months.
• Ethereum could bounce near $2,400 support after moving average resistance.

Ethereum (ETH) is down over 2% on Tuesday following an indication of selling pressure due to an uptick in its exchange reserve. However, other on-chain metrics indicate mixed investor sentiment amid ETH's price consolidation.

Daily digest market movers: ETH rising exchange reserve, new holders uptrend

Since August 29, Ethereum's exchange reserve has switched from a downtrend to an uptrend. Exchange reserve is the total amount of a cryptocurrency held in an exchange. An increase in an asset's exchange reserve indicates higher selling pressure and vice versa for a decrease.

According to CryptoQuant's data, Ethereum's exchange reserve increased by about 163K ETH, worth about $407.5 million, in the past five days. As a result, ETH may likely see short-term selling pressure until its exchange reserve starts declining again.

ETH Exchange Reserve

Meanwhile, despite Ethereum's price lag, its total number of holders has been in an uptrend, adding over 4 million new non-empty wallets in the past three months, per Santiment data. This takes the total number of ETH holders to nearly 127 million, meaning new market participants may be betting on an ETH price increase in the long term. In comparison, BTC's total holders declined by 50K during the same period.

ETH vs BTC Total Holders

While the Ethereum holders' count is growing, whale activity within the network has declined considerably from its peak during the market rally in early March. According to Santiment's data, Ethereum's whale transaction count declined from over 115K whale transactions between March 13-19 to 31.8K between August 21 and 27 — only about one-quarter of the March whale transaction count.

The decline is evidenced by the reduced volatility of ETH in the past few months, with the only exception being the market surge on May 20 and the crash on August 5. Whale activity often peaks when volatility increases, noted Santiment analysts.

ETH technical analysis: Ethereum could bounce around key support level

Ethereum is trading around $2,450 on Tuesday, down 2.5% on the day. In the past 24 hours, ETH has seen liquidations worth $26.94 million, with long and short liquidations accounting for $22.13 million and $4.81 million, respectively.

On the 4-hour chart, ETH's upward move was restricted by a convergence of the 200-day, 100-day and 50-day Simple Moving Averages (SMA) in the European trading session. As a result, ETH is attempting a move downward within a key rectangle with support and resistance levels at $2,400 and $2,817, resepectively.

ETH/USDT 4-hour chart

ETH may bounce around the $2,400 support level and stage another move up, but only after potentially liquidating positions worth $40.8 million at the $2,424 level, per Coinglass data.

A move outside the key rectangle will likely determine ETH's next price trend. A breach of the $2,400 support level could send ETH toward $2,111. A successful breakout above the $2,817 level and SMA resistance will see ETH rally toward $3,237.

The Relative Strength Index (RSI) and Stochastic Oscillator's (Stoch) %K line are trending below their midlines, indicating a short-term bearish outlook.