The amount of Ethereum's native Ether token (ETH) held with crypto exchanges has fallen to its lowest levels since September 2018, indicating traders' intention to hold the tokens in hopes of a price rally in 2022.
Notably, nearly 550,000 ETH, worth around $1.61 billion, have left centralized trading platforms so far this year, according to the data provided by Glassnode. The massive outflow has reduced the exchanges' net ether balance to 21.72 million ETH, down from its record 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, data from IntoTheBlock. shows. In detail, more than 180,000 ETH left crypto trading platforms on March 15, bringing the value of the weekly outflow to just over $500 million as of March 18.
Chainalysis data showed similar readings, developer that Ether tokens could have left exchanges this week averaging around 120,000 units per day, a bullish sign. Extracts:
"Assets held on exchanges rise if more market participants want to sell than buy and if buyers choose to store their assets on exchanges."
IntoTheBlock provided a similar bullish outlook by citing a fractal from October 2021 that saw the Ether price increases by 15% ten days after the Ethereum network detected massive ETH withdrawals from centralized crypto exchanges.
Ethereum supply crisis underway
the increase in Ether withdrawals of trades this week coincided with around 190,000 ETH moving to Lido โstETH liquid stakinโ pools, IntoTheBlock noted.
In short, Lido is a non-custodial engagement service that enables users to overcome the challenges associated with engaging in the Ethereum 2.0 beacon chain, including the requirement to wager 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.
The last 30 days showed Ether holders add more than 1 million ETH in the Ethereum 2.0 contract. And, as the protocol prepares to switch completely to proof-of-stake (PoS) in the summer, in the wake of its "Merge" earlier this week on the Kiln testnet โ increased the chance that more Ether tokens will be depleted from the active supply.
LOL. No one told Anon that there is going to be a liquidity squeeze on newly minted Ether in a few months. No newly minted Ether will enter circulation between Merge (June) and Shanghai (December). I'd text them, but I don't even have their number. You got it? poor Anon.
โ superphiz.eth (@superphiz) March 16, 2022
ETH price rally continues
The optimism surrounding Ethereum's move to proof-of-stake has led Ether to enter a rebound mode this week.
Related: Vitalik Buterin talks about the dangers of cryptocurrencies in an interview with Time magazine
In detail, the price of ETH is up over 17% week to date to nearly $3,000. Interestingly, the bullish pullback originated at the technical level, rising trendline support with a recent history of capping Ether's bearish outlook, as shown in the chart below.
Nonetheless, as Cointelegraph previously reported, Ether could reduce your profits due to another technical level, this time a descending trendline resistance which has also been instrumental in limiting their 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 of its resistance.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
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