The number of ethers (ETH) on the exchanges is at its lowest – Good news for the price?

How much of ETH is stored on exchanges?

It is a CryptoQuant analyst who reported on the progress of this indicator, in a publication published earlier this week. He indicates that the fall in the number of ETHs on exchanges has been particularly rapid. Only 14% of ETH supply is in fact stored on exchange platforms, a decrease of 7% over the last eleven months.

As can be seen in the following graph, the gradual decline in the number of ETHs on exchanges has accompanied a rise in the price of Ether throughout the year :

Percentage of ETH supply on exchanges – Source: CryptoQuant

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The link between the exchange platforms and the price

Within the crypto ecosystem, it is commonly believed that when cryptocurrencies pour into exchange platforms, it indicates that their holders wish they could sell quickly. So this is widely seen as a sign that the price may drop.

Conversely, when few cryptocurrencies are present on the exchanges – like ETH here – it is considered a positive sign. This may indicate that holders have stored their cryptocurrencies in “cooler” wallets, and therefore that they do not intend to sell soon.

In any case, this is the interpretation made by the analyst of CryptoQuant, over the medium term. He explains as follows:

I would say that [cette baisse des ETH sur les exchanges] is not yet fully reflected in the price. Because the price is almost at the same level as in May 2021. The price flattened / fell, while the percentage on the exchanges has decreased significantly. It cannot go on forever.

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ETH course progresses this week

Could ETH’s price soon reflect this investor confidence? This is particularly possible this week, as the second cryptocurrency progresses more than Bitcoin (BTC).

The price of BTC indeed seems to have been stopped dead by the latest statement by the Chairman of the US Federal Reserve, Jerome Powell, who warned yesterday against prolonged inflation. But ETH seems to be doing better.

While the largest cryptocurrency has posted a meager + 0.3% over the last 24 hours, Ether has increased by + 7% since yesterday. In just over two days, it even jumped by + 20%:

ETH Ethereum price

ETH price progression over the week – Source: TradingView, ETH / USDT

ETH now seems to have an easier time dissociating itself from trends affecting BTC. This morning he posted $ 4,752, with a capitalization of 561 billion dollars. Its predominance thus reaches 20% of the total market cap for cryptocurrencies, against 38% for BTC.

👉 On the same subject – JPMorgan considers Ether (ETH) to be a better investment than Bitcoin (BTC)

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About the Author : Marine Debelloir


Associate Editor on Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that arise from the blockchain and I like to unearth the crispest information to share it with you.
All articles by Marine Debelloir.

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