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On-chain data shows the Ethereum Supply on Exchanges has seen a sharp decline recently, something that could be bullish for ETH’s price.
A Large Amount Of Ethereum Has Left Exchanges Recently
According to data from the on-chain analytics firm Santiment, the ETH Supply on Exchanges has fallen to its lowest point in almost 10 years. The “Supply on Exchanges” refers to an indicator that measures the total amount of Ethereum that’s currently sitting in the wallets of all centralized exchanges.
When the value of this metric observes an increase, it means the investors are depositing a net number of tokens of the asset into these platforms. One of the main reasons why traders transfer to exchanges is for selling-related purposes, and this kind of trend can have a bearish impact on the ETH price.
On the other hand, the indicator going down suggests a net amount of the asset’s supply is leaving the exchanges. Such a trend may be a sign that the investors are accumulating, which can naturally prove to be bullish for the coin.
Now, here is the chart shared by the analytics firm that shows the trend in the Ethereum Supply on Exchanges over the past year:
Looks like the value of the metric has witnessed a plunge in recent days | Source: Santiment on X
As displayed in the above graph, the Ethereum Supply on Exchanges has seen a massive drawdown recently, implying the investors have made a large amount of net withdrawals.
Compared to seven weeks ago, there is now 16.4% less ETH on exchanges. This sharp change has taken the indicator’s value to the lowest level since 2015, nearly a decade ago.
From the chart, it’s apparent that the timing of this latest withdrawal spree has coincided with a plunge in the cryptocurrency’s price. The same graph also shows the data related to the Bitcoin Supply on Exchanges and it would seem that, even though the number one digital asset has seen a decline of its own, the metric has still only continued to move sideways.
It’s possible that this is a sign the whales are making a stronger push to buy the dip for Ethereum, as compared to Bitcoin. However, the more likely explanation may lie in the rich ecosystem of DeFi and staking services that ETH hosts, which may be where this supply is heading off to in this period of market cooldown.
While Ethereum appears positive from an on-chain perspective, the same isn’t true for technical analysis. As analyst Ali Martinez has explained in an X post, the zoomed-out ETH chart may contain a grim picture for the asset.
The TA pattern that ETH has been trading inside for the last couple of years | Source: @ali_charts on X
As is visible in the chart, Ethereum has seemingly been consolidating inside a parallel channel for a while now. Recently, the asset has been on the way down and as the analyst has marked in the chart, a move to the lower level of the channel may be brewing for the coin.
ETH Price
At the time of writing, Ethereum is trading at around $1,960, down more than 3% over the last seven days.
The price of the coin seems to have been moving sideways recently | Source: ETHUSDT on TradingView
Featured image from Dall-E, Santiment.net, charts from TradingView.com
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