Number of Ethereum on exchanges drops to 16%
The total supply of Ethereum on exchanges has fallen to less than 20% as investors continue to withdraw their holding. Could this be a bullish signal?
According to on-chain data from Santiment, the number of Ethereum sitting on exchanges has declined by nearly one-third over the past year even as the price of the leading altcoin surged by 800% in a year.
As of September 26, 2020, the overall supply of ETH on trading platforms was 24.1%. A year later, this percentage has decreased to 126.1%. Santiment opines that “this is a good sign for patient hodlers.”
Investors turn to ETH
There have been a few predictions suggesting that Ethereum could overthrow Bitcoin as the largest cryptocurrency by market cap in the long run. Although this subject is up for debate, it is hard to ignore that Ethereum has already surpassed Bitcoin in some areas, such as its daily trading volume.
The Ethereum blockchain is arguably the most utilized network, powering the latest trends in the NFT and decentralized finance markets. Recognizing the potential of the protocol, several investors have hyped its native cryptocurrency and have begun allocating funds to it. The likes of Mark Cuban and Robert Kiyosaki have openly admitted to exposing portions of their portfolio to the second-largest cryptocurrency.
A Bullish Trend?
The odds appear to be in favor of Ethereum. With ETH 2.0 (its transition to Proof-of-Stake consensus) on the way, investors are hopeful that the scalability and utility of the blockchain will increase.
The declining supply of ETH on exchanges could mean that investors are not in a hurry to sell their coins. Instead, they are moving it into cold storage, which could be viewed as a bullish sign.
Over the past year, the price of Ethereum has surged by more than 800%. In September last year, ETH traded at around $350. By the end of the year, it had doubled its value. It sustained this momentum into 2021, eventually breaking its 2018 ATH in mid-May when it set a new record of $4,400.