Nearly $1.61 billion worth of Ethereum tokens has been removed off cryptocurrency exchanges this year, ahead of the protocol’s possible complete conversion to proof-of-stake in the summer.
The quantity of Ethereum’s native token Ether (ETH) held by cryptocurrency exchanges has dropped to its lowest level since September 2018, indicating traders’ desire to keep the tokens in anticipation of a price rebound in 2022.
Notably, roughly 550,000 ETH — equivalent to around $1.61 billion — have been removed from centralised trading platforms year to far, according to Glassnode statistics. The exchanges’ net-Ether balance has been lowered to 21.72 million ETH, down from a record high of 31.68 million ETH in June 2020.
Since October 2021, the largest weekly ETH outflow has occurred
Interestingly, almost 30% of all Ether withdrawals from exchanges in 2022 occurred earlier this week, according to statistics from IntoTheBlock. On March 15, almost 180,000 ETH departed cryptocurrency trading platforms, pushing the weekly outflow to just over $500 million as of March 18.
Chainalysis data revealed comparable values, indicating that Ether tokens may have exited exchanges at an average rate of about 120,000 units each day this week, a positive indicator. Excerpts:
“If more market participants wish to sell than purchase, and if buyers opt to hold their assets on exchanges, assets held on exchanges grow.” IntoTheBlock had a similar bullish prognosis, citing an October 2021 fractal in which the price of Ether increased by 15% ten days after the Ethereum network identified huge ETH transfers from centralised crypto exchanges.
This week’s spike in Ether withdrawals from exchanges corresponded with the addition of about 190,000 ETH to Lido’s “stETH liquid stakin” pools, IntoTheBlock said.
To summarise, Lido is a noncustodial staking service that allows users to circumvent the restrictions associated with staking on the Ethereum 2.0 Beacon Chain, such as the necessity to stake at least 32 ETH or its multiples. Additionally, Lido seeks to address the capital efficiency issue with the issuance of stETH, a tokenized form of staked ETH.
Ether investors have injected nearly 1 million ETH into the Ethereum 2.0 contract during the previous 30 days. And, as the protocol prepares to transition entirely to proof-of-stake (PoS) in the summer — after its “Merge” on the Kiln testnet earlier last week — the likelihood of additional Ether tokens exiting active supply has grown.
The price recovery of ETH continues
Ether has entered a recovery phase this week as a result of the optimistic sentiment around Ethereum’s move to proof-of-stake.
In detail, the price of ETH has increased by more than 17% week to date to about $3,000. Surprisingly, the positive retracement began at a technical level, with a rising trendline support that has a recent history of containing Ether’s negative outlooks, as seen in the chart below.
Nonetheless, as previously noted by Cointelegraph, Ether’s advances may be limited by another technical level, this time a falling trendline barrier that has also played a role in limiting its upward efforts since January 2022.
Together, these trendlines seem to have created a continuation pattern known as a symmetrical triangle, suggesting that Ether will most likely continue in the same direction as its previous trend, namely down. For the time being, ETH may revert to the triangle’s support trendline upon a drop from its resistance trendline.
Also Read: SHIB Reaches The Top 10 List Of Crypto That Whales Are Hungry For
Wallets