The largest altcoin, Ethereum (ETH), broke its 2021 ATH and set a new record with the rise it experienced in August.
However, ETH, which could not escape the downward trend it experienced afterwards, could not recover and dropped below $4,000 with its latest decline.
While ETH is performing poorly in the short term, institutional demand continues to increase.
At this point, the amount of Ethereum held on centralized cryptocurrency exchanges has fallen to its lowest level since 2016 due to the increase in institutional accumulation.
The exodus of ETH from exchanges accelerated in mid-July and has since fallen 20% due to the aggressive accumulation of digital asset treasuries. As of Thursday, it had fallen to 14.8 million ETH, according to Glassnode data.
CryptoQuant’s Ethereum exchange supply ratio (exchange reserves divided by total supply) is also at 0.14, the lowest level since July 2016. This suggests that selling pressure in the market has decreased significantly.
What Does It Mean for Ethereum?
A decrease in exchange supply is typically a sign that the asset is being transferred to cold storage, staking, or DeFi for higher returns. This is interpreted as a signal that investors are moving ETH to cold storage wallets for long-term holding, and that the Ethereum price will rise in the future.
Conversely, an increase in stock market balances is generally a sign that investors are preparing to sell.
*This is not investment advice.
