The amount of Ethereum’s native token Ether (ETH) held at crypto exchanges has fallen to its lowest level since September 2018, indicating that traders plan to hold onto the tokens in hopes of a price hike in 2022.
Notably, nearly 550,000 ETH tokens — valued at around $1.61 billion — have exited centralized trading platforms so far, according to data provided by Glassnode† The massive outflow has lowered the exchanges’ net Ether balance to ETH 21.72 million, down from the record high of ETH 31.68 million in June 2020.
Ethereum balance on all exchanges as of March 18, 2022. Source: Glassnode
Largest weekly ETH outflow since October 2021
Interestingly enough, more than 30% of all Ether withdrawals from exchanges seen in 2022 showed up earlier this week, data from IntoTheBlock shows† In detail, more than 180,000 ETH exited crypto trading platforms on March 15, bringing the weekly outflow on March 18 to just over $500 million.
Ethereum net exchange flows. Source: IntoTheBlock
chain analysis data showed similar measurements, which revealed that Ether tokens could have exited the exchanges this week at an average of about 120,000 units per day, a bullish signal. fragments:
“Assets held on exchanges increase when more market participants want to sell than buy and when buyers choose to store their assets on exchanges.”
IntoTheBlock offered a similar upward outlook, citing a fractal from October 2021 that saw the price of Ether rise 15% ten days after the Ethereum network discovered massive ETH withdrawals from centralized crypto exchanges.
Ethereum supply crisis underway
The surge in Ether withdrawals from exchanges this week has coincided with about 190,000 ETH going into Lido’s “stETH liquid staking” pools, IntoTheBlock noted.
To summarize, Lido is a non-custodial staking service that allows users to overcome challenges associated with staking on the Ethereum 2.0 Beacon Chain, including the requirement to stake a minimum of 32 ETH or its multiples. Furthermore, Lido proposes to solve the capital efficiency problem by issuing stETH, the tokenized version of staked ETH.
The last 30 days showed Ether holders adding more than 1 million ETH in the Ethereum 2.0 contract. And as the protocol prepares to switch completely to proof-of-stake in the summer – in the wake of the “Merge” on the Kiln testnet earlier this week – more Ether tokens from the active hit offer.
LOL. No one told anon that there will be a liquidity shortage in the newly minted Ether in a few months. There will be no newly minted Ether in circulation between the Merge (June) and Shanghai (December). I’d text them, but I don’t even have their number. You’ve got it? Poor anon.
— superphiz.eth (@superphiz) March 16, 2022
ETH Price Recovery Continues
The bullishness surrounding Ethereum’s move to proof-of-stake has prompted Ether to enter a rebound mode this week.
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In detail, the price of ETH rose more than 17% week-to-date to nearly $3,000. Interestingly, the upward retracement emerged on a technical level – rising trendline support with a recent history of limiting Ether’s bearish outlook, as shown in the chart below.
ETH/USD daily price chart. Source: TradingView
Nevertheless, as Coin-Crypto previously described, Ether could narrow its gains thanks to another technical level, this time a falling trendline resistance that also played a role in truncation of its upward attempts since January 2022.
Together, these trendlines appear to have formed a continuation pattern called a symmetrical triangle, indicating that Ether will most likely move in the direction of its previous trend i.e. down. For now, ETH could fall back toward the triangle support trendline if its resistance pulls back.
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