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Ethereum on Exchanges Reaches 5-yr low, Is ETH Poised For a Massive Upswing or Downfall? Report

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  • Ethereum (ETH) balance on crypto exchanges has reached a new five-year low, with ETH withdrawals in 2023 surpassing deposits as investors anticipate a significant upturn in ETH prices.
  • The decreased balance is attributed to an increase in ETH staking, particularly following the Shanghai upgrade on April 12th. The reduced supply on exchanges is considered a bullish indicator for the ETH price.

Crypto Exchanges Witness a Historic Low in Ethereum Balance

According to CryptoQuant data, Ethereum (ETH) balance on crypto exchanges has hit a new low not seen in the past five years. 2023 has observed a significant rise in ETH withdrawals from exchanges, driven by investor expectations of substantial upward movement in ETH’s price.

The shift is partly instigated by the surge in ETH staking, which saw a notable increase after the Ethereum network’s Shanghai upgrade implemented on April 12. This raises the question of how these conditions might affect the ETH price trajectory.

ETH Balance on Exchanges Plunges to 16 Million

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CryptoQuant data reveals that the total ETH held in crypto exchanges has dwindled to a critical point. Currently, nearly 16 million ETH is stored on exchanges, a level unseen since July 2018, marking a 50% reduction from the all-time high.

The decrease in ETH reserves on crypto exchanges began in mid-2020, but the decline rate intensified in September 2022 when the Ethereum network transitioned to a proof-of-stake (PoS) consensus mechanism with the Merge upgrade.

Throughout 2023, the ETH balance on exchanges plummeted from 18.5 million to 16 million. This downward trend is expected to persist as Ethereum staking rises, particularly post the Shanghai upgrade. Etherscan data illustrates that approximately 22.98 million ETH, equivalent to $41 million, is currently staked on the Beacon Chain.

Potential Impact on ETH Price: Increase or Decrease?

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Historically, low exchange reserves have indicated reduced selling pressure and bullish market momentum. As a result, a decreased supply on exchanges could cause the ETH price to surge.

Over the past 24 hours, the ETH price rose by 2% and is currently trading above the $1800 mark. The 24-hour low and high stand at $1782 and $1817, respectively. Post-upgrade, volatility and trading volumes have diminished, bringing stability to the ETH price. As this trend continues, it’s anticipated that the scarcity of ETH on exchanges could fuel an upward price trajectory.

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Jack Williams
Jack Williams
As a Blockchain Analyst, I specialize in analyzing the performance of decentralized systems and optimizing their efficiency. Through data analysis, I provide insights on blockchain technology, smart contracts, and cryptocurrencies to help businesses make informed decisions and improve their operations.
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