Ethereum (ETH) marked a strong recovery over the past 24 hours, as buying during the U.S. market holiday helped support prices.
The world’s second largest cryptocurrency rose nearly 10% in the past 24 hours to $1,155.82- after coming close to breaking below the $1,000 mark again. Concerns over a U.S. economic recession, and a cascade of crypto bankruptcies have battered ETH this year.
Given the weak macro environment, the latest price bounce may be short-lived. Low trading volumes during the U.S. Independence Day holiday may have also factored into its sharp rise.
On-chain data shows that ETH is till being moved rapidly into exchanges, which makes the token vulnerable to more sell-offs.
ETH balance on exchanges close to 2022 highs
Data from on-chain analytics firm Santiment shows that as ETH crashed to near $1,000, the amount of tokens being moved onto exchanges steadily increased.
ETH supply on exchanges is at its highest in six months, indicating that traders have broadly dumped the token. Its saturation on exchanges also indicates that there is little scope for a strong price recovery.
$ETH continues to move rapidly back on to exchanges and is close to breaking 2022 highs. There is higher risk of a selloff while coins are rising on exchange wallets.
Broader crypto pressure remains
While both ETH and Bitcoin have logged a mild recovery in the past 24 hours, they are still trading down about 68% and 56% for the year, respectively.
ETH in particular has been hit even harder due to uncertainty over the timing of the merge, as well as liquidations of major holders Celsius and Three Arrows Capital.
Along with ongoing liquidations in the space, rising inflation and interest rate hikes by the Federal Reserve are also likely to weigh on capital flows into the space. Traders are currently interested only in shorting major cryptos.
As such, any immediate recovery in the market is likely to be short-lived.
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