Ethereum Supply on Exchanges Has Reached Record Lows

Ethereum's supply on exchanges has hit a record low, with only 14.5% of the total supply available for trading. This is a significant drop from the 25% seen just a few months ago.

The decrease in exchange supply can be attributed to the growing adoption of Ethereum staking, which has seen a surge in participation. Over 5 million ETH, or 20% of the total supply, has been staked.

As a result, the circulating supply of Ethereum has decreased, leading to a shortage of coins available for trading. This has had a ripple effect on the market, with prices increasing due to the reduced supply.

The trend is expected to continue, with many investors opting for staking over trading.

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Ethereum's total supply has reached 120 million ETH, its highest level since April 2023.

The burn rate, where ETH is permanently removed from circulation through transaction fees, has risen steadily since September, growing to over 2,700 ETH from a daily average of 80 ETH in August.

This increased burn rate can create deflationary pressure, which may lead to a supply squeeze that could contribute to favorable conditions for price increases.

CryptoQuant estimates the current upper price limit at $5,200, based on Ethereum's realized price, which reflects the average price paid by ETH holders.

The estimated upper price limit mirrors the peak of Ethereum's 2021 bull run, suggesting that if current demand and supply trends persist, ETH is positioned to reclaim and exceed its previous all-time high.

Just 10.3% of the total Ethereum supply is now being kept on exchanges, which is the lowest since the cryptocurrency was introduced almost eight years ago.

The current ETH supply on exchanges is an indicator that measures the percentage of the total Ethereum supply stored in the wallets of all centralized exchanges.

A trend of decreasing supply on exchanges can be a sign that accumulation is going on in the market, which may be bullish for the asset's price.

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The Ethereum supply on exchanges had been on a constant downtrend since the start of the bull run of this cycle until the middle of the bear market in 2022.

Investors deposited their ETH to exchanges during this period, which may have been a sign of capitulation as holders who bought during the bull run tend to exit out of the asset when bear markets set in.

The uptrend broke off around the time of the collapse of the cryptocurrency exchange FTX, after which investors became more aware of the risks of keeping their coins in central custody.

A large number of holders made withdrawals from exchanges to keep their Ethereum inside their personal wallets, causing the supply on exchanges to see a sharp plunge.

The rally this year has not reversed the downtrend, suggesting that there is enough demand for withdrawing the asset that any deposits being made are getting outweighed.

The percentage of the Ethereum supply on exchanges has dropped to just 10.3%, showing high confidence from the HODLers of the asset.

Ethereum has shown a strong recovery after the recent FOMC announcement, with a 5.35% increase in price.

Historical data indicates that Ethereum's price has been volatile in the past, but this recent recovery is a positive sign for investors.

The current valuation metrics suggest that Ethereum's price could reach $5,000, with some estimates even higher at $5,200, which is close to the peak of its 2021 bull run.

Ethereum's price has shown a strong recovery after the recent FOMC announcement, with a 5.35% increase.

This uptick in price is a welcome relief for investors who were worried about the potential impact of the FOMC announcement on the crypto market.

Historical data shows that Ethereum's price can be volatile, but this recovery is a positive sign for the future.

The circulating supply of Ethereum has also reached a multi-month high, standing at 120.22 million ETH at press time.

This is the highest level since December 2023, and it's a clear indication that more Ethereum is available in the market.

The reduction in user activity on the Ethereum network has led to an increase in the circulating supply, as fewer coins are being burned and more are being released into the market.

In the last week, the number of unique addresses that have completed at least one transaction involving Ethereum has plummeted by 13%.

This decline in user activity has also resulted in a decrease in daily transactions executed on the Ethereum network.

The total value locked (TVL) in Ethereum's decentralized finance (DeFi) ecosystem has cratered by 7% in the last month, reaching $58.96 billion.

This decline in TVL is a concerning trend, as it suggests that investors are losing confidence in the Ethereum network.

The sales volume in Ethereum's non-fungible token (NFT) sector has also plummeted by 43% in the last month, according to data from CryptoSlam.

This decline in sales volume is a clear indication that investors are not as interested in Ethereum's NFT sector as they once were.

The sustained accumulation of ETH by ETFs can significantly influence price as strong buying pressure from these vehicles may create upward momentum that could drive the asset closer to its all-time highs and beyond.

Since the launch of spot Ethereum ETFs in July 2024, the total ETH held by these ETFs in the United States has grown from 3.095 million to a record 3.41 million.

This increase follows a recovery from September 2024’s low of 2.716 million ETH, signaling renewed confidence in Ethereum as a viable investment.

As ETFs continue to buy and hold Ethereum, we can expect to see a sustained upward trend in the asset's price.

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