by Rushali 
Ether is having a bullish trend recently, and there are big investors who are behind this recent rally. According to a blockchain analytics firm Glassnode’s on-chain data, the number of people who are holding at least 10,000 ETH (often called Whales) jumped to a 13-month high of 1,103 on Saturday. More than 35 whale addresses have been created this month alone, and 75 since mid-November.
The cryptocurrency which is the second-largest according to market value touched a record high of $1,450 late Sunday. According to a CoinDesk 2 data, it represents a 90% gain on a year-to-date basis. But the problem behind this data is that drawing conclusions from metrics focusing on address growth changes should be done with care because a single user can control multiple addresses.
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The data also indicates a supply shortage at the centralized exchanges and facilitating a stronger bullish move, according to one analyst. The number of coins held on exchanges fell to the lowest level since October 2019 that is 15,469,582 over the weekend. The exchange balance has declined by more than 1 million in the past four days alone.
On Jan 20, exchanges witnessed a net outflow of 666,689 ETH. This is the biggest single-day exodus since May 2019.
Alex Kruger who is a trader and analyst has said, “ETH leaving exchanges is bullish as diminished supply makes it easier for the price to squeeze higher, generating a supply crisis,” “It’s clear to me large parties are accumulating.”
ETH’s outflow from exchanges doesn’t mean that investors are storing the coins. Some traders are likely depositing ether into decentralized exchanges and liquidity pools, while others could be “staking” coins to earn passive income. Staking refers to locking up cryptocurrency to receive rewards for participating in transaction validation on a proof-of-stake blockchain.
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Jehan Chu, managing partner at Hong Kong-based crypto investment firm Kenetic Capital said, “The ETH slingshot is only now being drawn back, and we can expect a powerful upward move in the first half of 2021,” further he said that increased staking and the growth in decentralized finance (Defi) is ratcheting up organic demand for the cryptocurrency.
Ether in Defi has increased from 6.615 million to 7.002 million in the past 15 days. But the tally still remains behind the January and 2020 numbers.
