On-chain data shows that Ethereum exchange supply has recently declined to an all-time low, suggesting that investors may be hoarding.
The supply of Ethereum on exchanges has continued its downward trend recently
According to data from the on-chain analysis firm HolyETH on exchanges is now at its lowest point since the cryptocurrency began public trading in July 2015. “ETH on exchanges supply” is an indicator that measures the percentage of Ethereum’s total circulating supply that is currently being traded. found in the wallets of all centralized exchanges.
When the value of this metric goes up, it means that investors are currently depositing their coins into the wallets of the exchanges. Since one of the main reasons holders may transfer their ETH to these platforms is for sale-related purposes, this type of trend can have bearish implications for the price.
On the other hand, a decrease in the value of the indicator implies that exchanges are looking at the withdrawal of a net amount of the asset at this time. Such a trend, when prolonged, can be a sign that investors are piling up and thus can have a bullish effect on the value of the cryptocurrency.
Now here is a graph showing the trend in the supply of Ethereum on exchanges over the past few years:
The value of the metric seems to have been going down since a while now | Source: Santiment on Twitter
As shown in the chart above, the supply of Ethereum on exchanges has been falling for a few years now, suggesting that investors have been steadily withdrawing from these platforms.
The indicator has continued to decline while the rally has occurred, but recently there was a temporary break in trend, where the metric experienced a brief rise. This rise was nothing significant, but the fact that it came right around the time of the last drop in the price of the cryptocurrency (which has now taken it below the $1,800 level) may be a sign that these deposits are they made to sell.
However, it was not long before supply on the exchanges resumed its downward trend, implying that further buying may have been made at current relatively low prices.
After this latest continuation in the general downward trend of Ethereum supply on exchanges, now only 10.1% of the total circulating supply remains in the wallets of these platforms, which is the lowest value the coin has ever seen. since its opening week long ago. in July 2015.
This all-time essential low in the indicator could be a positive sign for the cryptocurrency in the long run, as it shows increased awareness in the market about the risks of holding your coins on centralized exchanges.
It is currently unclear how long the current price decline may last, but the new pullbacks taking place could be, at the very least, a sign that there are still buyers available in the market.
ETH price
As of this writing, Ethereum is trading around $1,700, down 10% over the past week.
ETH has plunged recently | Source: ETHUSD on TradingView
Featured Kanchanara Image on Unsplash.com, Charts from TradingView.com, Santiment.net
