Ethereum traders could have a lot to look forward to owing to these developments

ambcrypto.com:

Ethereum [ETH] bears have been dominant since last week, leading to a higher price drop towards the lower range for 2022. Amid all this, there were some interesting observations that investors should take note of.

ETH’s exchange reserves dropped back to the lowest year-to-date levels. The last time that exchange reserves were this low was at the start of the second week of September. The price did manage to achieve a slight uptick before being slapped down.

The low exchange reserves are a particularly important observation especially taking into account the estimated leverage ratio. The latter just reached a new historic high, indicating that many traders have executed leveraged positions.

Source: CryptoQuant

ETH’s open interest also had a net positive gain in the last two weeks or so. This was confirmation that there was a healthy demand from the derivatives market. The low exchange reserves and relatively high demand in the derivatives market may explain why many ETH traders have opted to execute leveraged trades.

Low exchange reserves can be seen as confirmation that ETH was flying off exchanges now that prices were even lower. The higher open interest and estimated leverage ratio highlighted current expectations of a supply shock. The most likely expectation being a bullish one considering ETH’s latest bearish price action.

The expected outcome will only occur if ETH’s current demand levels favor the upside. Exchange flows highlighted a contrasting image. Both exchange inflows and outflows decreased substantially in the last two weeks. Outflows were slightly higher than inflows during the weekend but the latest readings indicated higher inflows than outflows.

Source: Glassnode

The higher exchange inflows suggested that