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Ethereum [ETH] price plunges as exchange supply reaches record lows

2min Read

As Ethereum’s price slides, its supply on exchanges reaches an all-time low, while bullish investors hold on.

Ethereum [ETH] price plunges as exchange supply reaches record lows

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  • Ethereum’s supply on exchanges hit an all-time low, with only 10.1% of the total supply available for trading.
  • Investors remain optimistic about Ethereum’s future despite liquidations, as the exchange funding rate is still positive.

Following its remarkable 6% surge in value on 5 May, Ethereum [ETH] has embarked on a consistent downward trajectory. Yet, the diminishing price is not the sole metric experiencing a decline recently; another crucial supply metric was also steadily dwindling.


Read Ethereum (ETH) Price Prediction 2023-24


Ethereum supply on exchanges dips to ATL

As of this writing, Ethereum was trading at approximately $1,760, reflecting a more than 1% loss. Per the daily timeframe chart, this decline persisted consecutively for the past seven days.

Alongside the price decline, there was also a notable decrease in the supply of ETH available on exchanges, as per data from Santiment. 

Ethereum supply on exchanges

Source: Santiment

The current supply on exchanges accounted for around 10.1% of the total supply, marking the lowest level observed since ETH started trading in 2015.

This metric suggested that more individuals were opting to hold ETH in self-custody. Also, it meant that the number of assets held off exchanges reached an all-time high.

Negative Netflow dominates Ethereum flow

Examining the flow of Ethereum on exchanges could provide valuable insights into the situation surrounding its declining supply.

The Netflow metric on CryptoQuant revealed that there was a notable increase in the outflow from exchanges in recent days.

However, as of this writing, the Netflow was positive, albeit considerably lower than the negative Netflows that prevailed in previous days. 

ETH exchange Netflow

Source: CryptoQuant

Furthermore, an analysis of the metric indicated that there was a higher amount of Ethereum leaving exchanges than entering them since the start of the year.

This suggested that holders were actively securing custody of their assets for a significant period. Also, the recent price decline may have intensified this trend.

Investors remain positive despite liquidations

According to data from Coinglass, the 24-hour liquidation volume of Ethereum exceeded $30 million. Interestingly, most liquidations occurred on the long side, totaling over $50 million, whereas the short side experienced approximately $14 million.

However, despite these liquidations, the current funding rate suggested that investors remained optimistic. As of this writing, the funding rate remained positive across exchanges, indicating that most investors anticipated a price increase soon.

Ethereum funding rate

Source: Coinglass


How much are 1,10,100 ETHs worth today


It remains uncertain whether a rise in Ethereum’s price would prompt more individuals to return their assets to exchanges. However, this could likely happen.

Nonetheless, at present, investors seem content to hold onto their Ethereum.

 

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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