The Ethereum exchange supply has hit an all-time low, according to on-chain data. This suggests that investors may be accumulating the cryptocurrency rather than selling it off.
Santiment, an on-chain analytics firm, reported that ETH on exchanges is now at its lowest level since the coin started tradingSponsored Product publicly in July 2015. The “ETH supply on exchanges” metric measures the percentage of total circulating Ethereum sitting in centralized exchange wallets.
When this metric increases, it means investors are depositing their coins into these platforms for selling-related purposes. Such a trend can have bearish implications for prices as more sellers flood the market with their assets.
On the other hand, when there’s a decrease in this indicator’s value over time, it implies that exchanges are observing withdrawals of net amounts of assets from them right now. When prolonged such trends indicate accumulation by investors and hence bullish effects on cryptocurrencies’ values.
As displayed in Santiment’s graph above showing Ethereum supply levels across various years; the downward trend indicates constant withdrawal by investors from centralized platforms like exchanges.
However recently there was temporary breakage where we saw a brief increase but soon after resumed downtrend again indicating fresh purchases made at current relatively lower price points.
Following this latest continuation in overall downtrend of Ethereum supply levels available through centralised crypto-exchanges – just 10% remains within those wallets which marks essential all-time lows- could signal positive signs long-term due to increasing awareness around risks associated with keeping digital currencies stored centrally versus decentralised storage optionsSponsored Product.
At present writing (July 2021), Etheruem trades around $1700 USD down about ten percent week-on-week basis.
Featured image from Kanchanara via Unsplash.com while charts sourced TradingView.com & Santiment.net
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