On-chain data from Santiment shows that the supply of Ethereum on exchanges has fallen by 37% since the merger last September.
Ethereum supply on exchanges continues to decline lately
According to network analytics firm Saint, ETH continuing to leave exchanges could be good news for the cryptocurrency. “Exchange Supply” is an indicator that measures the total amount of Ethereum currently held in the wallets of all centralized exchanges.
When the value of this metric increases, investors transfer a certain number of coins to exchanges. Since one of the main reasons holders can list their coins on exchanges is to sell them, this trend could have a bearish effect on the price of an asset.
On the other hand, the downward indicator suggests that net supply is currently leaving these platforms. Since the exchange offer can be seen as a sort of affordable “sell offer” for ETH, a decline in its value can naturally be bullish for the coin.
Now here is a chart showing the trend of Ethereum supply on exchanges over the past few months:
The value of the metric seems to have sharply gone down in recent days | Source: Santiment on Twitter
As shown in the chart above, the supply of Ethereum on exchanges was around 19.12 million ETH as early as September 14, 2022, when the much publicized merger took place, which successfully transitioned the network’s consensus mechanism to Proof of Stake (PoS). ) one.
Since then, the figure has declined significantly, bringing the number of exchanges remaining today to just 13.36 million ETH. In terms of capital loss, today’s offering on the exchange is worth about 37% less than at the time of the merger.
And in terms of the net difference in the total supply of coins, these platforms hold about 30% less Ethereum today than at the date of the PoS update. Sentiment sees this as good news for the Ethereum market, as the available supply for sale has steadily dwindled in recent months.
The chart shows that the strongest drawdown of the indicator occurred after the collapse of the FTX crypto exchange. The reason for this is that a well-known platform such as FTX is starting to fear centralized exchanges again among investors, forcing them to transfer their coins to third-party wallets.
The price of Ethereum registered a decline last week. However, as seen in the chart, the supply of Ethereum on exchanges has declined significantly since this price drop, which could be a sign that investors are hoarding more while ETH is at a “discount”.
Ether Price
At the time of writing, Ethereum is trading around $1,500, down 8% over the past week.
It looks like the value of ETH hasn't moved much in the last few days | Source: ETHUSD on TradingView
Credit : www.newsbtc.com
