Key Highlights:
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Significant decrease in ETH supply on exchanges hints at a forthcoming rally.
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Ethereum’s decentralized exchange (DEX) weekly volume soared by 47%, indicating growing market optimism.
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Historical data shows Ethereum typically gains around 4.77% in October on average.
Ether (ETH) recently climbed back above the $4,000 mark, reaching approximately $4,200. This upward move gained momentum with a 3.5% increase in just 24 hours, sparking anticipation among traders for a possible bull run revival throughout October. Both onchain metrics and technical analysis support this promising outlook.
One major catalyst is the falling supply of ETH on centralized exchanges. Institutional investors have been accumulating ETH and withdrawing it from exchanges to self-custody wallets, staking platforms, or new wallets, significantly lowering exchange reserves to levels last seen in 2016. These conditions often set the stage for price rallies once demand intensifies.
Supporting this bullish stance, CryptoQuant analysts highlight three main causes driving down ETH reserves on exchanges: investors moving assets to self-custody, increased staking activity, and transfers to fresh wallets. The ongoing trend of rising Ethereum outflows from exchanges parallels activity seen during the late bear market phases in 2022, signaling potential strong upward price movement ahead.
Ethereum’s decentralized finance environment also strengthens this bullish case. Activity on Ethereum’s decentralized exchanges (DEX) jumped 47% in a week, reaching $33.9 billion, up from $22.9 billion the previous week. This surge also reflects increased engagement on layer-2 solutions such as Base, Arbitrum, and Polygon. Meanwhile, competing networks have seen more modest DEX volume growth, with Solana up 6%, and Binance Smart Chain increasing by 8.3%.
Prominent Ethereum DEXs like Maverick Protocol and Uniswap recorded notable volume increases of 30% and 26%, respectively, reinforcing Ethereum’s continued dominance and user confidence. Historically, such volume spikes have preceded significant price growth, exemplified by ETH doubling in value during a 276% DEX volume rise to a record $40 billion between late June and mid-August.
Although ETH/USD faced a 6% dip in September aligning with typical market corrections, October traditionally brings positive returns for Ethereum, averaging a 4.77% gain historically. This suggests ETH could approach $4,300 in the short term.
Crypto analyst Marzell highlighted this trend, noting October often ignites the fourth quarter pump, encouraging investors to prepare for an exciting Q4 rally. Analyst Midas backs this viewpoint, citing comparable patterns from Q3 2020 that led to over 100% returns in Q4, reinforcing expectations for strong performance ahead.
Disclaimer: This post is for informational purposes only and does not constitute financial advice. Investment decisions carry risk, and readers should conduct their own research before acting.
