ETH Supply on Exchanges Has Been Declining Since May; Reaching Nov. 2018 Levels
The drop in Bitcoin supply on exchanges amidst continued demand saw its prices explode which can be seen with ETH soon with its futures coming on CME and ETHE yet to buy any Ether.
As Bitcoin takes to ranging, altcoins are rallying. However, unlike other altcoins Ether is also resting, above $1,200, like the leading cryptocurrency. But this is the usual liquidity cycle of the crypto market — a huge rally on Bitcoin is followed by a breakout on ETHBTC which then leads to an uptrend in major crypto assets and after that mid-cap, and finally, the small-caps get their chance of significant greens.
But still, a bullish continuation of ETH is expected. “Buy volume remains strong as price navigates life above the 20 week Slow Moving Average (SMA). Major breakout level just above the current price at .0366 BTC,” and a weekly close above would be very bullish for the digital asset, as per Hxro Labs.
Another thing working in Ethereum’s favor is the amount of ETH available on cryptocurrency exchanges. Just last week, more than 621k ETH were moved out of the exchanges, as per IntoTheBlock.
As of writing, 22.9 million ETH is on exchanges, a level last seen in Nov. 2018. This decline in ETH’s supply in exchange has been going on since early May 2020, during which it has seen a slide of almost 28%. Sanitment notes,
“The ratio of Ethereum tokens sitting on exchanges continues to decrease & move to offline holder wallets. At just 22.06% of tokens on exchanges compared to 26.33% five months ago, this continues to be one of the most promising signs for ETH bulls.”
If we look at Bitcoin supply on exchanges, it is only 7.3%, as per Viewbase, which started decreasing in mid-Feb. Over this more than one year period, BTC supply on exchanges has declined by about 35% and the price of Bitcoin has exploded higher.
The same can be expected from ETH prices as increasing amounts of ETH gets moved off of exchanges for HODLing purposes, to lock in for staking in ETH 2.0 deposit contract which currently has 2.55 million ETH, and to lock-in DeFi which has reached 7 million.
Not to mention, in less than a month, CME will be launching ETH futures that will bring institutions.
Additionally, unlike Bitcoin, Grayscale Investment has yet to add any ETH since Dec. 9, 2020. During this period, compared to zero ETH, GBTC bought 65.32k BTC, an increase of almost 12% in its BTC holding. This continued strong demand has also propelled Bitcoin’s price higher.