While the amount of ETH on cryptocurrency exchanges appears to be in free fall, it has never been so low in 9 years. What can we say about this?
The amount of ETH on exchanges is at its lowest in 9 years
Earlier today, we discussed the fall in Ethereum’s ETH over the last few days, and more specifically its brief dip below $4,000.
Counterintuitively, however, the number of ETH on centralized platforms continues to decline, to such an extent that, with 14.8 million units according to Glassnode data, this statistic has never been so low since the summer of 2016.
Historically, such a finding may suggest that investors are not yet ready to sell and are instead choosing to store their Ether via self-hosted wallets, which may seem somewhat contradictory to the increase in staking outflows, which could support a bearish scenario.
We discussed these outflows in our article on the drop below $4,000, and it’s worth noting that nearly 260,000 ETH are currently in a 4.5-day queue to be deposited with validators. Although this is not enough to offset the outflows, the amount of ETH staked remains close to its all-time high (ATH) of 35.71 million on July 17, with nearly 35.62 million units today, or 29.42% of the amount of ETH in circulation:
Returning to the number of ETH on exchanges, it should be borne in mind that this figure alone is not sufficient to estimate whether investors are preparing to sell or not.
On Monday, we discussed the annual low in Google Trends searches for “bitcoin” and argued that this bull run was driven mainly by institutional investors rather than new entrants. Based on this assumption, a similar argument can be made for centralized exchanges.
And with good reason: considering that the current cycle has few new entrants, it is reasonable to assume that experienced investors will be less dependent on centralized exchanges to sell their ETH, as they are able to do so directly from on-chain applications.
Meanwhile, the price of ETH stands at $4,000 at the time of writing, down 4.37% over 24 hours.
