Data on the chain shows that as investors continue to withdraw ETH, the exchange of Ethereum supply has fallen to a new all-time low.
Ethereum supply in exchange continues to decline recently
In a new post on X, the chain analysis company Santiment discusses the latest trends in Ethereum exchange supply. “Exchange Supply” refers to an indicator that, as the name implies, has shown that the percentage of the total ETH supply currently located in the wallet of a centralized exchange.
When the value of the indicator rises, this means investors are depositing net numbers into these platforms. One of the main reasons why a holder can transfer coins to exchange is that for sales-related purposes, this trend may have a bearish impact on the price of coins.
On the other hand, a drop in indicator means that supply is leaving communication. Typically, investors plan to withdraw coins from their self-monitored wallets for a long time, so this trend can be bullish on cryptocurrencies.
Now, here is a chart shared by analytics companies that show the supply trends in Ethereum exchanges over the past few years:
The value of the metric appears to have been following a downward trajectory for a while now | Source: Santiment on X
As shown in the above figure, the Ethereum supply on the exchange has been showing a long-term downward trend, but there are temporary periods of deviation.
One such phase happens when the Bulls run to the end of 2024, which is some potential signals that some investors have decided to exit ETH in profitable opportunities.
However, in the months since the peak, the indicator has returned to a downward trajectory, indicating that holders have recovered from accumulation. Today, the indicator is priced at 4.9%, the lowest value ever recorded.
In the same chart, Santiment also attaches supply data for Bitcoin exchange. It seems that over the past few years, the number one cryptocurrency has also seen a trend of net outflows, and unlike ETH, there is no significant deviation.
Investors have withdrawn 1.7 million BTC from exchanges over the past five years. The value of the indicator will increase to 7.1% since November 2018. During the same period, ETH holders took 15.3 million tokens from these platforms.
It is important to remember that although communication played a central role in the market a few years ago, that was not the case. The emergence of exchange-traded funds (ETFs) means there is another major portal now entering the industry, so exchange outflows may not have the same impact as before.
ETH price
At the time of writing, Ethereum’s rise was about $2,500, down more than 2% last week.
Looks like the price of the coin hasn't moved much recently | Source: ETHUSDT on TradingView
Featured images from dall-e, santiment.net, charts from tradingview.com
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