Analysts make a bold prediction that the price of Ethereum could reach 20,000 dollars.

In recent news about Ethereum, the balance on exchanges has fallen to its lowest level in nine years, currently only 14.8 million ETH. This decline occurs against the backdrop of digital asset (DAT) companies and exchange-traded fund (ETF) continuing to ramp up accumulation activities, consistently withdrawing Ethereum from exchanges.

At the same time, market sentiment is becoming more active. A cryptocurrency expert pointed out the possibility of a strong bull run occurring in the near future. They predict that Ethereum could rise from the current price of 4,002.46 USD to as much as 20,000 USD, equivalent to a potential increase of five times.

Prediction of Ethereum price reaching 20,000 USD

According to cryptocurrency analyst Cantonese Cat, Ethereum is approaching a critical phase in its long-term market cycle. He shared his price prediction for Ethereum on platform X, emphasizing that each major price surge of ETH is often followed by a deep correction, leading to what he calls a "cyclical liquidity zone." These zones have consistently served as accumulation areas before Ethereum embarks on its next explosive price rally.

Source: XCurrently, the market structure is no different. Ethereum is approaching the upper boundary of the current liquidity area, supported by a stable uptrend line that has existed for many years. The intersection of upward support and horizontal resistance is a classic setup that often occurs before a breakout. If ETH can surpass this area, it could mark the beginning of the next expansion phase.

Based on historical patterns, such a surge is likely to push prices well beyond previous highs, with long-term targets extending deep into the five figures. What makes this outlook even more appealing is the alignment between technical and fundamental factors.

Ethereum supply on exchanges reaches a 9-year low

The balance of Ethereum on centralized exchanges has fallen to its lowest level since 2016, as institutions continue to engage in Accumulation. The flow of Ethereum (ETH) stable into long-term storage is tightening supply and reducing the available supply for trading.

Source: GlassnodeEthereum activity on exchanges has been declining over the past few years. Since mid-2020, this number has been continuously shrinking, with the available supply decreasing by nearly half over the past two years. Notably, withdrawal activity accelerated in mid-July of this year, with balances dropping an additional 20% as DATs ramped up their buying.

Data from Glassnode shows that there are only 14.8 million ETH on the exchange, marking the lowest level in nine years. Other indicators also confirm a similar trend. CryptoQuant reports that the ratio of ETH supply on the exchange, tracking reserves as a part of the total supply, has decreased to 0.14, the lowest level since July 2016.

When the supply on the exchange decreases, it often indicates that investors are moving their assets into cold storage, staking platforms, or decentralized finance protocols in search of higher yields. Conversely, when balances on exchanges increase, it usually suggests that holders are preparing to sell or take profits.

The tug and pull between the inflow and outflow of funds provides insight into market sentiment and the intentions of major investors. In recent news, CryptoQuant reported that the 30-day moving average of the overall net flow on the Ethereum exchange has risen to its highest level since late 2022 this week, indicating an increase in activity.

Commenting on this trend, a contributor from CryptoQuant, CryptoOnchain, explained that "large-scale withdrawals often indicate a shift towards self-custody or DeFi deployment, reducing liquidity on the exchange and immediate selling pressure."

At the same time, Glassnode noted that the net position change of ETH on the exchange recorded a negative 2.18 million ETH on Wednesday. Analysts pointed out that this figure has only been surpassed five times in the past decade, highlighting the scale of this withdrawal action.

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