The balance of available ether (ETH) across crypto exchanges fell to a five-year low on May 26, bringing the total amount of Ether held on exchanges to 17.86 million. A drastic drop in ETH supply on an exchange like this has not been seen since April 2018.
According to Glassnode data, only 14.85% of the total ether supply is currently held on centralized exchanges, compared to 25-26% of the supply held during the 2021 bull run.
The decline in ETH supply started in September 2022 and dropped significantly after the FTX crisis in November. In addition to the drop in exchange balance, Ethereum wallet addresses with more than 100 ETH also fell to a six-month low.
#Ethereum $ETH The number of addresses holding 100+ coins just hit a 6-month low of 46,858
View metric:https://t.co/FbjiMG3uFX pic.twitter.com/uzHN7H2qRy
— glassnode alerts (@glassnodealerts) May 18, 2023
Two significant events may have influenced the decline of ETH balances on centralized exchanges in the recent past. The first is the collapse of the FTX crypto exchange, which prompted many to move their crypto-assets from exchange wallets to wallets for safekeeping; the second and most important is the Shapell upgrade.
Shapella cleared the way for thousands of validators to withdraw their staked ETH. However, contrary to popular belief, a minority of validators decided to quit, while the majority simply withdrew their staking rewards.
Movement of assets away from exchanges is considered a bullish sign, indicating that traders do not want to sell at the current price. In the case of Ethereum, the re-staking of ETH is the most obvious reason for the exchange’s declining supply.
Related: Ethereum price metrics suggest that ETH may not sell off after the Shapella hard fork
Major crypto exchanges like Binance, Bitfinex, Kraken and more supported Shapell upgrade experienced a significant outflow of ETH from their exchange wallets, resulting in a drop in the current balance.
As Cointelegraph previously reported, an amount of ETH was staked in the week following Shapelly’s upgrade exceeded the amount of ETH withdrawn. Another report from Glassnode estimated that less than 1% of the staked ETH was expected to be sold. A significant part of ETH, which is moving away from centralized exchanges, has thus returned to betting.
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