Ether balance on exchanges close to all-time low

The amount of ether (ETH) held on exchanges has reached a level not seen since July 2016, as staking takes up available ether.

Data from Glassnode indicates that as of Thursday, 14.85% of all ether was held in wallets owned by centralized exchanges. The market has not seen a level this low since ether was in its early stages during the summer of 2016.

The balance held on centralized exchanges has nearly halved in three years. (Glassnode) (Glassnode)

On the other hand, during the bullish market of 2021, the exchange balance was around 25-26%. Low exchange balances are typically a bullish sign as it means the supply of ether available for purchase is limited, thus putting pressure on prices to increase.

In recent weeks, the growing popularity of staking has helped to soak up the supply from the market.

The introduction of the Shapella upgrade to the Ethereum network has triggered a surge in ether staking, with over 4.4 million additional coins deposited since the upgrade, as large ether holders increasingly opt for generating passive income rather than liquidating their assets.

“This trend is expected to continue, especially given that deflationary forces are expected to drive up the price of Ether significantly,” analysts at Binfinex previously shared with CoinDesk. “Prior to this upgrade, potential stakeholders may have been deterred from staking their ether tokens due to concerns about their funds being locked up for an unacceptably long duration.”

All of this comes as crypto trading volumes decline by double digits.

Binance, the world’s largest cryptocurrency exchange, experienced a 48% decrease in spot trading volume for the second consecutive month in April, reaching $287 billion – the second-lowest since 2021 – with its market share also reducing to 46%, reflecting a broader 40% industry-wide decline due to macroeconomic uncertainties and U.S. bank collapses.

According to CoinDesk market data, Ether is currently trading at $1,816, up 2%.

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