The amount of Ethereum’s native token, Ether (ETH), which is held on cryptocurrency exchanges has fallen to its lowest levels since September 2018, signaling traders’ intention to hold the tokens in hopes of a price rally in 2022.
In particular, Nearly 550,000 ETH tokens — worth about $1.61 billion — have left centralized trading platforms so far this year, according to data provided by Glassnode. The massive outflow has reduced exchanges’ net balance of Ether to 21.72 million ETH, down from its all-time high of 31.68 million ETH in June 2020.
The largest weekly ETH outflow since October 2021
Interestingly, more than 30% of all Ether withdrawals from exchanges witnessed in 2022 appeared earlier this week, according to show the data from IntoTheBlock. In detail, more than 180,000 ETH left cryptocurrency trading platforms on March 15, bringing the value of the weekly outflow to just over $500 million as of March 18.
The Chainalysis data showed similar readings, revealing that Ether tokens could have exited exchanges this week at an average of about 120,000 units per day, a bullish sign. Extracts:
“Assets held on exchanges increase if there are more market participants willing to sell than buy and if buyers choose to store their assets on exchanges.”
IntoTheBlock provided a similar bullish outlook while citing a fractal from October 2021 that saw the price of Ether rise 15% ten days after the Ethereum network detected massive withdrawals of ETH from centralized cryptocurrency exchanges.
Ethereum supply crisis is underway
The surge in Ether withdrawals from exchanges this week coincided with around 190,000 ETH being moved to Lido’s “stETH liquid staking” pools, IntoTheBlock noted.
To recap, Lido is a non-custodial staking service that allows users to overcome the 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 problem of capital efficiency by issuing stETH, the tokenized version of staked ETH.
In the last 30 days, Ether holders have added more than 1 million ETH to the Ethereum 2.0 contract. And as the protocol prepares to switch entirely to proof-of-stake in the summer – in the wake of its “Merge” earlier this week on the Kiln testnet – the likelihood of more Ether tokens running out active supply has increased.
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? Pooranon.
— superphiz.eth (@superphiz) March 16, 2022
LOL. No one has told anon that there is going to be a dwindling of newly minted Ether liquidity in a few months. No newly minted Ether will enter circulation between the merger (June) and Shanghai (December). I’d text them, but I don’t even have their number. You got it? poor Anon.
ETH price rebound continues
The optimism surrounding Ethereum’s move to proof-of-stake has sent Ether into bounce mode this week.
Specifically, the price of ETH has risen more than 17% so far this week, reaching almost $3,000. Interestingly, the bullish pullback originated from a technical level – ascending trendline support with a recent history of capping Ether’s bearish outlook, as shown in the chart below.
However, as Cointelegraph previously covered, Ether could clip its gains due to another technical level, this time a descending trendline resistance that has also been instrumental in capping its upside attempts since January 2022.
Together, these trend lines appear to have formed a continuation pattern called a symmetrical triangle, indicating that Ether will likely go in the direction of its previous trend, i.e. down. For now, ETH could pull back towards the support trend line of the triangle on a pullback from its resistance.
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