About $1.61 billion in Ethereum tokens has been traded out of the cryptocurrency market so far in 2016. That’s just in time for its full transition to proof-of-stake, which could happen in the summer.
The amount of Ethereum’s native token, Ether (ETH), held by crypto exchanges has fallen to its lowest level since September 2018. This shows that traders plan to keep the tokens in their wallets in the hope that prices will rise in 2022.
This is a big deal: Glassnode data shows that nearly 550,000 ETH tokens, worth about $1.61 billion, have left centralized trading platforms this year. In June 2020, the net balance of the exchanges was 31.68 million ETH, down from a record high of 31.68 million ETH in June 2020.
Biggest outflow of ETH in a week since October 2021
Over 30% of all withdrawals of Ether from exchanges in 2022 happened this week, data from IntoTheBlock shows. As of March 18, more than 180,000 ETH had left crypto trading platforms on March 15, bringing the weekly outflow’s value to more than $500 million as of March 18.
Chainalysis data showed the same thing. It said that Ether tokens could have left exchanges this week at an average rate of about 120,000 units per day, which is a good sign. Excerpts:
“Assets held on exchanges increase if more market participants want to sell than to buy and if buyers choose to store their assets on exchanges.”
In October 2021, IntoTheBlock cited a fractal that saw the price of Ether rise 15% ten days after the Ethereum network found a lot of ETH withdrawals from centralized crypto exchanges.
The supply of Ethereum is running low
The number of people withdrawing Ether from exchanges this week went up, and about 190,000 ETH moved into Lido’s “stETH liquid staking” pools at the same time.
Lido is a non-custodial service that lets people who want to stake on the Ethereum 2.0 Beacon Chain avoid some of the problems that come with staking on the chain, like having to stake 32 ETH or its multiples. Another way to solve the capital efficiency problem is to make stETH, which is the tokenized version of staked ETH.
Over the last 30 days, people who own Ether have put more than 1 million ETH into the Ethereum 2.0 deal. It’s also more likely that more Ether tokens will run out of active supply as a result of the protocol’s “Merge” this week on the Kiln testnet. This is because the protocol is set to switch to proof-of-stake in the summer.
Lol. No one told anon that there's going to be a liquidity squeeze in newly minted Ether in a few months. No newly minted Ether will enter circulation between the Merge (Juneish) and Shanghai (Decemberish). I'd text them but I don't even have their number. You got it? Poor anon.
— superphiz.eth 🦇🔊🐼 (@superphiz) March 16, 2022
The rise in the price of ETH is still going
A lot of people are excited about Ethereum’s switch to proof-of-work this week, which has caused Ether to rebound.
ETH’s price has gone up more than 17% this week to almost $3,000. As you can see in the chart below, the retracement came from a technical level: a rising trendline support with a recent history of keeping Ether from going down.
As said earlier, Ether might be able to slow down its gains because of another technical level, this time a falling trendline resistance that has also been important in stopping it from going up since January 2022.
Together, these trend lines look like they have formed a continuation pattern called a symmetrical triangle, which means that Ether is likely to go down in the same direction as it went up. For now, ETH could fall back toward the triangle’s support trendline if it comes down from its resistance one on a drop.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.