Glassnode, an on-chain analytics provider, has conducted an analysis that shows the sum of Ether on exchanges has dropped to its lowest level in close to two years. Glassnode approximates that there is only 13.3 million Ether held by centralized exchanges at the moment. The amount is the lowest it has been since June 2019. Therefore, the centralized exchanges have around $52.4 million worth of ETH which is 11.5% of the entire supply of Ether.
— glassnode alerts (@glassnodealerts) May 10, 2021
The current number of Ether of centralized platforms is a drop by 30% in just nine months since the peak to 19 million in September 2020.
The meaning of the drop for Ether
It is believed that a low Ether balance on exchanges is an indication of a bullish market, as Ether influences a reduction in supply relative to demand on popular trading platforms. The reducing exchange balances can be an indication that long-term investors are transferring their assets into either storage on to decentralized finance protocols where they can yield returns through staking or yield farming.
Bitcoin Investors converting BTC into ETH
Glassnode’s Week-On-Chain” Monday report noted that Bitcoin had suffered a reduction in exposure as investors favoured Ether. Glassnode linked spending patterns of relatively old Bitcoin unspent transaction outputs of between six months and three years, finding indication that long-term BTC investors might have recently converted their holdings to ETH.
The report explains that the distinct increase in the older BTC being spent back into circulation after a long holding period makes a compelling case towards this connection. On-chain activity has gone up over the last four weeks for Ethereum during the recent bullish price action from Ether. Additionally, the total number of smart contract calls, Uniswap transactions and daily transactions have experienced significant upticks since the start of the year.
For instance, this week alone recorded an all-time high in the number of daily transactions, standing at 1.62 million, an increase by 22.5% over December 2017’s peak. Ether prices are currently trading above $4,000 which is slightly lower than its recent all-time high of $4,220 on Monday.
The rising price of Eth has made headlines, as the token just recently broke past $3k for the first time. Ether is recording some of the biggest numbers in the entire market, even above Bitcoin, which is still struggling to trade above $60k.
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