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What happened? On May 25, the number of Ethereum coins on centralized cryptocurrency exchanges (CEX) approached an all-time low, accounting for only 14.85% of the total supply. Such low levels were last observed in July 2016. The fall in the indicator coincided with an increase in the amount of ETH locked in staking, CoinDesk reports, citing data from the analytical platform Glassnode.
News on the CoinDesk website
What else is known? Analysts note that during the 2021 bull market, 25-26% of the ETH supply was stored on CEX. However, a low balance is usually bullish, as it means that the supply of coins available for purchase is limited.
At the same time, the release of the Shapella update, which allowed the withdrawal of ETH from staking, on the contrary, caused a surge in the blocking of coins – since April 12, more than 4.4 million additional ETH have been deposited on deposits.
Analysts at the Bitfinex crypto exchange believe that the trend will continue, given that the deflationary mechanism for burning part of the transaction fees, implemented along with the transition of the blockchain to the Proof of Stake (PoS) consensus algorithm on September 15 last year, will significantly increase the price of the asset. They also added that before the release of Shapella, the inability to unlock assets stopped many investors from participating in the staking program.
The reduction in the balance of ETH occurred against the backdrop of a double-digit decline in cryptocurrency trading volumes. On the largest exchange, Binance, spot trading volumes fell by 48% in April to $287 billion. This reflects a more than 40% drop in the industry as a whole, caused by macroeconomic uncertainty and the collapse of a number of US banks.
BTC and ETH Total Trading Volume Drops to Lowest in 4 Years
From May 10 to May 17, BTC traded at $11.45 billion and ETH at $4.62 billion
As of May 26, 18:20 Moscow time, Ethereum is trading on Binance at $1,826, adding 1.67% in a day. The capitalization of ETH is 219.5 billion dollars, and the market share is 19.7%.
Earlier, Santiment analysts recorded a drop in the number of bitcoins and Ethereum on CEX. As of May 20, users held only 5.7% of BTC supply and 10.1% of ETH on the platforms, the lowest levels since December 2017 and July 2015, respectively. According to experts, a decrease in the indicator usually indicates a future bull market.
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