The price of Ethereum, the second-largest cryptocurrency by market capitalization, has moved back up to the $1,200 mark after falling below $1,000 earlier this week at a time in which outflows from cryptocurrency exchanges suggest demand could outstrip supply.

According to Nuggets News’ Alex Saunders, data shows that exchange reserves have fallen by 3 million ETH over the last two days, with 1 million ETH leaving crypto trading platforms on January 14, and 2 million leaving them the following day.

Saunders shared data from on-chain analytics firm CryptoQuant and pointed out that at this rate exchanges could soon run out of ETH.

Price predictions for ETH have been extremely bullish – with former Goldman Sachs executive and Real Vision CEO Raoul Pal saying he believes Ethereum could go to $20,000 this cycle based on Metcalfe’s law – and as such Saunders believes HODLers will not be selling their funds between $1,000 and $2,000 per ETH.

Some other data providers seemingly show that Ethereum reserves on cryptocurrency exchanges have dropped by 42.5% since mid-May. The analyst interprets the data as suggesting an incoming bull run to a new all-time high for ether, as “we all know what happened when demand outstripped supply of BTC.”

The price of bitcoin surged from about $12,000 to a new all-time high near $42,000 after reserves on exchanges dropped by about 4.5% and corporate adoption surged as MassMutual, MicroStrategy, Square and others bought BTC as a hedge against inflation and currency debasement.

Rafael Schultze-Kraft, CTO at data firm Glassnode, countered Saunders saying his data was “nonsense,” saying that a sudden drop of over 2 million ETH from a cryptocurrency exchange weren’t withdrawals, and that “exchange flows are completely within their normal range.”

It’s believed the 2 million ETH were moved to a new Bitfinex cold wallet for Ethereum that cryptoQuant did not account for. That, however, does not explain the 1 million ETH outflows seen the day before.

It’s worth noting that the decentralized finance (DeFi) space has been booming, and more Ethereum users could simply be withdrawing their funds to interact with these protocols on-chain.

Featured image via Unsplash.