While efforts to recover in the cryptocurrency market continue, the supply of Ethereum (ETH) on exchanges has dropped to its lowest level in a year. On-chain data indicates that investors are withdrawing their ETH from exchanges to hold them long-term, while the increase in leverage usage signals a higher risk appetite in the market. As the cryptocurrency market has been making efforts to bounce back recently, Ethereum (ETH) saw a 9% increase in value last week. With the overall market recovery in place, the rising ETH could gain stronger momentum alongside some critical developments seen in on-chain data. The decrease in ETH supply on exchanges to its lowest level in a year and the increasing leverage usage by investors are among the factors supporting bullish expectations.

ETH SUPPLY ON EXCHANGES DROPS TO ANNUAL LOW
According to the on-chain analysis platform CryptoQuant’s data, the exchange reserve of ETH has dropped to 18.32 million. This figure represents a 7% decrease from the 19.74 million coin level reached on February 2. The reserve amount on exchanges represents the supply available for active trading on a platform. The decrease in reserves indicates that investors are starting to hold their ETH in long-term wallets, stake them, or turn towards a potential spot ETH ETF. This trend could reduce the circulating ETH supply in the market, creating upward pressure on the price.

INVESTORS INCREASING LEVERAGE USAGE
In addition to the decrease in ETH supply on exchanges, there is an observed increase in investors’ interest in leveraged trading. CryptoQuant data reveals that Ethereum’s Estimated Leverage Ratio (ELR) indicator reached its highest level of 0.686 on March 21 since the beginning of the year. After a slight pullback, this ratio is currently at the 0.683 level. The ELR indicator measures the average leverage amount used by investors to trade on a cryptocurrency exchange. A high ELR ratio suggests that investors have strong expectations for the future rise in ETH price and, therefore, they are trying to increase their positions with leverage. Despite fluctuations in ETH price since the beginning of the year, the growing leverage ratios indicate a significant increase in investors’ risk appetite.

ETH Price at Critical Levels: $2,224 or $1,924?
Ethereum’s price increased by 4% in the last 24 hours, reaching $2,089. According to Elder-Ray Index data, as buying pressure in the market increases, the green histogram bars on the indicator show a strengthening upward trend. The indicator value climbed to 52.80, reaching the highest level in the last 30 days. These data suggest the beginning of an upward trend in ETH price, with bulls attempting to control the market. If Ethereum buyers maintain control, it is possible for the price to test the $2,148 level. However, in case selling pressure increases, ETH could first drop to $1,924, and then further down to $1,759. The overall market outlook indicates a critical period for Ethereum. The decrease in supply on exchanges and the rise in leveraged positions are viewed as signals of an upsurge. Nevertheless, any potential change in investor sentiment or an unexpected development in market conditions could lead to new fluctuations in ETH price.