Ether on the Edge: Exchanges Witness 5-Year Low as ETH Teeters on the Verge – Will it Ignite a Thrilling Surge or Tumble into the Abyss? Report

  • The quantity of available Ether (ETH) on cryptocurrency exchanges has plummeted to an astonishing low, marking a significant milestone not seen in the past five years. 
  • The current balance of ETH on exchanges is approximately 16 million, a level not seen since July 2018. 

On May 26, the quantity of available Ether (ETH) on cryptocurrency exchanges reached its lowest level in five years, with a balance of ETH $1,832. This decrease caused the total amount of Ether held on exchanges to be 17.86 million. Such a significant reduction in the supply of ETH on exchanges hasn’t been observed since April 2018.

Based on data from Glassnode, the current percentage of the total Ether supply held on centralized exchanges stands at only 14.85%, significantly lower compared to the 25-26% supply held during the bullish market period in 2021. The decline in Ether (ETH) supply was initiated in September 2022 and experienced a substantial drop following the FTX crisis in November of the same year. 

The decline in Ether exchange balances  Source: Glassnode

In addition to the decrease in exchange balances, the number of Ethereum wallet addresses holding over 100 ETH has reached a six-month low. In the past few weeks, notable events have led to the decline of Ethereum on CEXs.

The first is the downfall of the FTX cryptocurrency exchange, which prompted numerous individuals to transfer their crypto assets from exchange wallets to self-custody wallets. The second, perhaps the most significant, factor is the Shapella upgrade.

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Shapella paved the way for thousands of validators to withdraw their staked ETH. However, despite the prevailing belief, only a minority of validators opted to unstake their ETH, while the majority simply withdrew their staking rewards.

The shift of assets away from exchanges is seen as a bullish indication, suggesting that traders do not intend to sell at the current price. In the case of Ethereum, the primary reason for the diminishing supply on exchanges is the re-staking of ETH.

Renowned cryptocurrency exchanges such as Binance, Bitfinex, Kraken, and others, which extended support for the Shapella upgrade, witnessed a substantial outflow of Ethereum from their exchange wallets, resulting in the current balance decline.

Additionally, based on data from CryptoQuant, the overall quantity of ETH held in cryptocurrency exchanges has reached a critical threshold. The current balance of ETH on exchanges is approximately 16 million, a level not seen since July 2018. This represents a 50% decrease from the all-time high.

Since 2020, there has been a decrease in Ethereum reserves on cryptocurrency exchanges. However, the pace of decline notably accelerated in September 2022 due to the Merge upgrade, and the Ethereum network changed to proof-of-stake (PoS). A noteworthy point to consider is that according to Etherscan data, there is currently a total of 22.98 million ETH, equivalent to $41 million, staked on the Beacon Chain.

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Unveiling the ETH Price Analysis: Insights and Trends

ETH in the past 24 hours has risen a whopping 0.72%. As of press time, ETH is currently trading at $1,828.65. The 24-hour high and low are $1,837 and $1,810, respectively. Following the upgrade, market volatility and trading activity decreased, stabilizing the price of ETH.

Generally, when exchange reserves are low, it suggests a decrease in selling pressure and a positive bullish trend. With limited supply available in the market, it can lead to an upward movement in the price of ETH.

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