ETH balances on crypto exchanges drop to lowest level since 2018

Nearly $1.61 billion worth of ethereum tokens have flowed out of crypto exchanges so far this year. The Ethereum protocol may fully transition to PoS consensus this summer. 

The amount of ethereum’s native token (ETH) deposited on crypto exchanges has fallen to its lowest level since September 2018, suggesting traders are leaning toward holding the token in hopes of a price rebound in 2022.

Notably, nearly 550,000 ETH — worth about $1.61 billion — has flowed out of centralized exchanges so far this year, according to data provided by Glassnode. The massive outflow reduced the exchange’s net ETH balance to 21.72 million ETH, down from an all-time high of 31.68 million ETH in June 2020.

ETH balances on crypto exchanges drop to lowest level since 2018

Largest weekly ETH outflow on record since October 2021

Interestingly, data from IntoTheBlock shows that over 30% of all ETH outflows in 2022 occurred at the beginning of the week. In detail, over 180,000 ETH left the crypto exchange on March 15, with a weekly outflow of just over $500 million in value as of March 18.

ETH balances on crypto exchanges drop to lowest level since 2018

Chainalysis data shows similar figures, with an average of 120,000 ETH likely to leave exchanges per day this week, which is a bullish sign. An excerpt from the report follows:

“If there are more market participants who want to sell than they want to buy, and buyers choose to store assets on exchanges, then there will be more asset holdings on exchanges.”

IntoTheBlock offered a similar upside prediction, while citing a fractal in October 2021 that saw the price of ETH jump 15% ten days after the Ethereum network detected a large outflow of ETH from centralized crypto exchanges.

ETH supply crunch

IntoTheBlock noted that the increase in the amount of ETH withdrawn from exchanges this week coincided with about 190,000 ETH entering Lido’s “stETH liquid stakin” pool.

In short, Lido is a non-custodial staking service protocol that helps users overcome thresholds associated with staking on the Ethereum 2.0 beacon chain, including a requirement to stake a minimum of 32 ETH. Additionally, Lido proposes to address the capital efficiency issue by issuing stETH, a tokenized version of staked ETH.

Over the past 30 days, ETH holders have staked over 1 million ETH in Ethereum 2.0 contracts. And, as the protocol prepares to fully switch to PoS consensus over the summer, the probability of more ETH flowing out of the circulating supply has increased.

“Lol. No one told the poor little ones that there will be a liquidity squeeze on ETH in a few months. Between the merger (around June) and the Shanghai upgrade (around December), no new ETH will go into circulation. I Wanted to text them, but I don’t even have their number. Do you? Poor man.”

— superphiz.eth (@superphiz) March 16, 2022

ETH price continues to rebound

The bullish sentiment surrounding Ethereum’s switch to PoS has prompted Ethereum to enter a rally mode this week.

In detail, the price of ETH has rebounded more than 17% so far this week, approaching $3,000. Interestingly, as the chart below shows, the upside pullback stems from a technical level, supported by an ascending trendline, with recent history limiting the bearish outlook for Ethereum.

ETH balances on crypto exchanges drop to lowest level since 2018

However, as previously reported by Cointelegraph, ETH may not gain much as another technical-level factor is a descending trendline resistance, which has also been an important factor in stifling its upside attempts since January 2022.

Together, these trendlines appear to form a continuation pattern known as a symmetrical triangle, indicating that ETH is likely to head in the direction of its previous trend, which is to decline. For now, ETH is likely to retreat towards the support trendline of the triangle as it retraces from its resistance trendline.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2022-03-21 09:20
Next 2022-03-21 09:21

Related articles