{"id":330206,"date":"2021-08-25T19:50:02","date_gmt":"2021-08-25T16:50:02","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/ethereum-supply-shock-exchange-eth-reserves-continue-to-fall-after-a-26-drop-in-2021\/"},"modified":"2021-08-25T19:50:02","modified_gmt":"2021-08-25T16:50:02","slug":"ethereum-supply-shock-exchange-eth-reserves-continue-to-fall-after-a-26-drop-in-2021","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/ethereum-supply-shock-exchange-eth-reserves-continue-to-fall-after-a-26-drop-in-2021\/","title":{"rendered":"# Ethereum supply shock: Exchange ETH reserves continue to fall after a 26% drop in 2021"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3430a8e2eee\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3430a8e2eee\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereum-supply-shock-exchange-eth-reserves-continue-to-fall-after-a-26-drop-in-2021\/#Ether_deposits_plunge\" >Ether deposits plunge<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereum-supply-shock-exchange-eth-reserves-continue-to-fall-after-a-26-drop-in-2021\/#Supply_Squeeze\" >Supply Squeeze<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Ethereum supply shock: Exchange ETH reserves continue to fall after a 26% drop in 2021 <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>The amount of Ether (ETH) held by all cryptocurrency exchanges has declined dramatically in the previous 12 months.<\/p>\n<p>Blockchain analytics firm CryptoQuant reported that Ethereum reserves on trading platforms dropped 26.29 million ETH to 19.22 million ETH year-on-year (YoY), indicating that traders&#8217; preference to hold their tokens increased.<\/p>\n<p>At least the Ether price performance in the same period indicates the same. Between August 25, 2020, and press time, the ETH\/USD exchange rate exploded by a little over 730%\u2014 from $407 to $3,190, signaling an erratic inverse correlation between the Ethereum token prices and its reserves across all exchanges.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-08\/363c03d9-217d-4d94-95f5-6adc39a721a4.png\"><figcaption style=\"text-align: center;\"><em>Ethereum reserves versus ETH\/USD price performance YoY. Source: CryptoQuant<\/em><\/figcaption><\/figure>\n<p>In detail, traders typically prefer to keep their crypto assets on exchange wallets when they wish to trade them in the near term. Otherwise, they move those assets to private wallets to control their own keys, a strategy that stems from the fears of losing funds to hacks and similar security breaches at crypto exchanges.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Ether_deposits_plunge\"><\/span>Ether deposits plunge<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Another on-chain indicator, built by CoinMetrics to track the total number of Ether deposits to exchanges, also alerted holding sentiment among Ethereum traders. It noted that traders&#8217; ETH deposits across all the trading platforms had <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/messari.io\/asset\/ethereum\/chart\/exch-flow-in-ntv\">plunged 21.11% YoY<\/a>, from\u00a0413,772 ETH to 326,408.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-08\/c71709f6-1357-4f2a-9dbc-0bd34cf8faca.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>Ethereum deposits on exchanges. Source:\u00a0<\/em><em>CoinMetrics<\/em><em>, Messari<\/em><\/figcaption><\/figure>\n<p>But in the last 30 days, the ETH deposits have dropped dramatically by 47.81%, signaling that many investors are expecting higher prices in the long term. <\/p>\n<p>Meanwhile, the sum count of unique addresses holding any amount of Ether in the last 30 days has <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/messari.io\/asset\/ethereum\/chart\/act-addr-cnt\">jumped 1.67%<\/a>, coinciding with a 42% ETH\/USD rally in the same period.\u00a0On a YoY timeframe, the unique address count has jumped 30.87%.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-08\/0b2b4de2-0fb5-4f5d-9e6c-701a5e1c7c26.png\"><figcaption style=\"text-align: center;\"><em>Ethereum address count. Source: CoinMetrics, Messari<\/em><\/figcaption><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"Supply_Squeeze\"><\/span>Supply Squeeze<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Ether holding sentiment has picked momentum in days leading up to and after a landmark Ethereum network upgrade on August 5, 2021. Dubbed as the London Hard Fork, the software update implemented a proposal called EIP-1559 that enabled gas fee burning on the Ethereum network.<\/p>\n<p>This has added deflationary pressure as a result. In the first 20 days after EIP-1559 went live, the network has burned almost\u00a092,595 ETH worth around $295.85 million, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/watchtheburn.com\">according to WatchTheBurn.com<\/a>.<\/p>\n<p><strong><em>Related:\u00a0Ethereum \u2018liquidity crisis\u2019 could see new ETH all-time high before Bitcoin \u2014 Analyst<\/em><\/strong><\/p>\n<p>More Ether went out of active supply as Ethereum invited participants to deposit 32 ETH to become validator on its upcoming proof-of-stake blockchain. Beacon Chain reports that the so-called Ethereum 2.0 smart contract has attracted a little over 6.9 million ETH worth around $22 billion.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-08\/802909f1-413e-43b9-be7c-014c858a714b.png\"><figcaption style=\"text-align: center;\"><em>Staked Ether in Ethereum 2.0 smart contract. Source: BeconCha.in<\/em><\/figcaption><\/figure>\n<p>Additionally, demand for Ether continues to grow owing to Ethereum&#8217;s expanding ecosystem, containing projects from the booming decentralized finance (DeFi) and nonfungible token sectors.\u00a0<\/p>\n<p>Last week, Lyn Alden, the founder Lyn Alden Investment Strategy, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.forbes.com\/sites\/billybambrough\/2021\/08\/19\/crypto-price-prediction-bitcoin-could-be-about-to-soar-to-100000-and-ethereum-5000-as-cardano-and-solana-suddenly-surge\/?sh=5f72337e56b7\">called<\/a> the London upgrade a\u00a0&#8220;tactically bullish&#8221; event, noting that it could easily push ETH\/USD rates to over $5,000.<\/p>\n<p class=\"post-content__disclaimer\">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 conduct your own research when making a decision.\n<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/ethereum-supply-shock-exchange-eth-reserves-continue-to-fall-after-a-26-drop-in-2021\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Ethereum supply shock: Exchange ETH reserves continue to fall after a 26% drop in 2021 &#8221; The amount of Ether (ETH) held by all cryptocurrency exchanges has declined dramatically in the previous 12 months. Blockchain analytics firm CryptoQuant reported that Ethereum reserves on trading platforms dropped 26.29 million ETH to 19.22 million ETH year-on-year&#8230;<\/p>\n","protected":false},"author":1,"featured_media":330207,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDgvMTQ4MjkzMDAtZjRlYy00NjVmLTkxOTktMmZmYmI0MWNiMDFlLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[82962,82402,74891,75326,112518,81210,74938,74939,75679,75150,105688,74876,73785],"class_list":["post-330206","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-coinmarketcap","tag-ether-price","tag-ethereum","tag-ethereum-2-0","tag-ethereum-novice","tag-ethereum-options","tag-ethereum-price","tag-market-analysis","tag-market-capitalization","tag-market-update","tag-markets-pro","tag-proof-of-stake","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/330206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=330206"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/330206\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/330207"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=330206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=330206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=330206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}