The price of Ethereum is on the rise, surpassing $3,100 with a 2.3% increase in the last 24 hours. Despite this uptick, the overall trend shows a 3.3% decline over the week, indicating a bearish sentiment.

While this slight recovery brings some comfort, Ethereum continues to face challenges from the prevailing bear market conditions. Analysts are closely monitoring Ethereum’s on-chain metrics to gain insights into the future trajectory of the cryptocurrency.

A critical aspect under scrutiny is Ethereum’s spot exchange reserves. A recent analysis by Cryptoavails on the CryptoQuant QuickTake platform reveals a consistent decrease in Ethereum reserves held on spot exchanges. This shift suggests changing strategies among market participants regarding their asset management.

Analysis of Ethereum’s Spot Exchange Reserves Trend

Historically, Ethereum reserves on spot exchanges have experienced significant fluctuations. The 2017-2018 bull market saw a peak in reserves due to heightened investor interest. Subsequently, the rise of the DeFi ecosystem and Ethereum-based projects drove another surge during 2020-2021.

However, since late 2021, there has been a notable decline in reserves as large withdrawals from exchanges increased. By 2023, reserve levels hit a low point, persisting through 2024, indicating a potential supply shortage. Reduced reserves imply a shift towards long-term storage strategies over active trading, potentially fueling price appreciation.

Cryptoavails highlights that as reserves dwindled from 2022 onwards, Ethereum’s price stabilized at higher levels, indicating a positive correlation. This trend signals the potential for further price hikes, potentially initiating a new bullish phase.

Technical Analysis of Ethereum (ETH)

Technical analysis of Ethereum suggests a bullish outlook, with prominent figures in the crypto community sharing their perspectives. Crypto Caesar noted a bounce in Ethereum’s price as a significant opportunity, projecting new all-time highs and considering the cryptocurrency undervalued.

$ETH – #Ethereum bounced as expected. This was a huge opportunity. Send it.
In my opinion, Ethereum is heavily undervalued. I think we will see new ATH’s soon. pic.twitter.com/ljMa1lEpJO
— Crypto Caesar (@CryptoCaesarTA) January 28, 2025

Contrarily, analyst Anup Dhungana pointed out a divergence in market behavior between Bitcoin and Ethereum, with Ethereum showing weaker performance against Bitcoin. This discrepancy reflects waning investor interest in Ethereum compared to other assets.

Dhungana indicated a possible technical support level for ETH/BTC between 0.028 and 0.026, suggesting a rebound from this range could reignite interest in Ethereum and altcoins, setting the stage for growth.