The supply of Ethereum on the exchange has continued to decrease recently and has now touched a value of 10.3%, effectively the lowest of all time.
Only 10.3% Of The Total Ethereum Supply Is Currently Held On The Exchange
According to data from an on-chain analytics company Holythe current supply of ETH on the exchange is the lowest since the week the cryptocurrency was introduced almost eight years ago.
“Supply on exchange” is an indicator that measures the percentage of the total supply of Ethereum that is currently held in the wallets of all centralized exchanges.
When the value of this metric goes down, it means that some coins are taken from the platform now. The trend, when extended, can be bullish for asset prices as it can be a sign of accumulation in the market.
On the other hand, the continuously rising metric value indicates investors are depositing ETH into the current exchange. As one of the main reasons why holders transfer to these platforms is for sale-related purposes, this kind of trend can have a bearish effect on the value of these assets.
In the graph of the history of the exchange rate of Ethereum to Ethereum, you can see the history of changes in the value of the currency.
The value of the metric seems to have been going down in recent days | Source: Santiment on Twitter
As shown in the graph above, the supply of Ethereum on the exchange has decreased continuously since the beginning of this cycle, until the middle of the bear market in 2022.
The indicator observed some growth during this period, indicating that investors are investing in the platform. This may be a sign of capitulation, as shareholders who bought during a bull run tend to exit the asset when a bear market enters.
This uptrend that is increasing, however, ended at the time of the collapse of the FTX cryptocurrency exchange. The reason behind this is that, after seeing what happened with FTX, investors became more aware of the risks of keeping coins in central custody.
So, many owners make withdrawals from the platform to keep Ethereum in their private wallets. Due to this movement, the supply on the exchange seems to have collapsed.
Interestingly, as the rally has been underway this year, the metric still hasn’t reversed its trend and gone further. Usually, deposits can be expected during a period with a bullish trend because some holders want to make a profit.
The fact that the indicator just continued its downward trend indicates that there is enough demand to withdraw assets if the deposits created will exceed it.
After the latest downward trend in the indicator, the percentage of Ethereum supply on the exchange has dropped to only 10.3%. Santiment believes that this reflects the high confidence of HODLers of the asset.
The lowest value of ETH
At the time of writing, Ethereum is trading around $1,700, down 1% over the past week.
Looks like the the asset has been consolidating recently | Source: ETHUSD on TradingView
Featured images from Jievani Weerasinghe on Unsplash.com, charts from TradingView.com, Santiment.net