The supply of Ethereum on exchanges has continued to fall recently and has now touched a value of 10.3%, effectively a new all-time low.
Only 10.3% of the total Ethereum supply is now held on exchanges
According to data from the on-chain analysis firm Holythe current supply of ETH on exchanges is the lowest it has been since the week the cryptocurrency was introduced nearly eight years ago.
“Supply on exchanges” is an indicator that measures the percentage of the total supply of Ethereum that is currently stored in the wallets of all centralized exchanges.
When the value of this metric goes down, it means that some coins are being pulled from these platforms right now. Such a trend, when prolonged, can turn out to be bullish for the asset price, as it can be a sign that it is accumulating in the market.
On the other hand, the upward trend in the value of the metric implies that investors are depositing their ETH on exchanges currently. As one of the main reasons holders transfer to these platforms is for selling related purposes, this type of trend can have a bearish effect on the value of the asset.
Now, here’s a chart 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 in recent days | Source: Santiment on Twitter
As shown in the chart above, the supply of Ethereum on exchanges has been on a steady downward trend since the start of this cycle’s bull run, until the middle of the bear market in 2022.
The indicator saw some growth during this period, suggesting that investors were depositing into these platforms at the time. This may have been a sign of capitulation, as holders who bought during the bull run tend to exit the asset when bear markets set in.
However, this building uptrend was interrupted at the time of the crash of the FTX cryptocurrency exchange. The reason behind this was that after seeing what happened with FTX, investors became more aware than ever of the risks of holding their coins in central custody.
Therefore, a large number of holders made withdrawals from such platforms to keep their Ethereum within their personal wallets. Due to this movement, the supply on the stock exchanges experienced a sharp drop.
Interestingly, as the rally has taken place this year, the metric has yet to reverse its trend and has continued to decline. Deposits can normally be expected during uptrend periods as some holders would like to take their profits.
The fact that the indicator has only continued the downtrend suggests that there is enough demand to withdraw the asset that any deposits being made are being outpaced.
Following the latest downward trend in the indicator, the Ethereum supply percentage on exchanges has dropped to just 10.3%. Santiment believes that this demonstrates the great confidence of HODLers in the asset.
ETH price
As of this writing, Ethereum is trading around $1,700, down 1% over the past week.
Looks like the the asset has been consolidating recently | Source: ETHUSD on TradingView
Featured image by Jievani Weerasinghe on Unsplash.com, Charts from TradingView.com, Santiment.net
