In the aftermath of the United States Securities and Exchange Commission (SEC) approving spot Ethereum exchange-traded funds (ETFs) on May 23, 2024, cryptocurrency exchanges have witnessed a significant outflow of Ethereum (ETH). This development highlights the substantial impact of regulatory decisions on market dynamics.

According to data and observations shared by renowned crypto trading expert Ali Martinez, approximately 777,000 ETH, valued at around $3 billion, has left crypto exchanges since the SEC's approval. This substantial withdrawal is evident in the Glassnode chart, which showcases a significant drop in the total balance of Ethereum on all crypto exchanges, from around 12.5 million ETH to a lower level.

Ethereum's Price Performance

At the time of writing, Ethereum was trading at $3,821.12, indicating a 0.75% increase in the last 24 hours and a 2.43% decline over the previous seven days. However, it has shown significant strength on its monthly chart, advancing 22.94%. Additionally, Ethereum has reclaimed a key trendline that has been crucial for over seven years, as reported by Finbold on June 1.

Ethereum ETF Effect

The price of Ethereum began to rise on May 20, shortly after Bloomberg's senior ETF analyst Eric Balchunas predicted that the chances of spot Ethereum ETF approval were 75%, up from an earlier 25%. This prediction was made after hearing that the SEC might reverse its earlier stance on the issue, which had been increasingly political.

During this period, Martinez noted that Ethereum whales had purchased 110,000 ETH, worth around $341 million, in the 24 hours leading up to his X post on May 20. This significant increase in interest from the market's largest holders was likely driven by the expectation of spot ETF approval.

Conclusion

The massive withdrawal of Ethereum from exchanges suggests that crypto traders and investors are increasingly choosing to secure their holdings in anticipation of further price growth and reduced selling pressure on exchanges. This trend is typically seen as a bullish sign, indicating a growing preference for holding Ethereum rather than selling it on exchanges.