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Japan's Analysts Predict Ethereum's Rebound as Supply Shortages Ignite Bullish Sentiments

Recent trends have indicated a surge in institutional demand for Ethereum, bringing its price tantalizingly close to its all-time high (ATH) of 2021.

However, expectations for surpassing that ATH have been delayed due to adverse macroeconomic data from the U.S. market.

Notably, analysis from Japan-based XWIN Research suggests that Ethereum's bullish outlook is reinforced by significant supply constraints.

The report highlights that the amount of ETH available on exchanges has dwindled, with ETH balances plunging drastically since July’s end.

Daily withdrawals from exchanges have frequently exceeded 100,000 ETH, with a notable withdrawal of 92,899 ETH, valued at $412 million, occurring on Kraken recently.

Additionally, spot Ethereum exchange-traded funds (ETFs) recorded unprecedented inflows amounting to $2.85 billion just last week.

These dynamics are pushing analysts to assert that a robust bull market could emerge as Ethereum's circulating supply tightens.

David Duong, Head of Research at Coinbase, echoed these views, emphasizing ongoing high demand driven by treasury companies acquiring substantial amounts of ETH.

Since early August, these companies have amassed approximately 795,000 ETH, equivalent to about $3.6 billion, representing 2% of the total supply.

If current trends continue, Ethereum may be poised for a significant price surge as supply shortages and institutional demand converge towards the year’s end.