- ETH reserves across centralized crypto exchanges fell to a five-year low.
- Staked ETH supply has been hitting new all-time highs almost daily.
Ethereum’s [ETH] liquid supply plummeted to new depths, as seasoned investors explored options other than active trading.
As per a recent update by on-chain analytics firm Glassnode dated 11 August, ETH reserves across centralized crypto exchanges fell to a five-year low of 15.1 million ETH. To put this in context, the amount represented just 12.57% of all ETH tokens in circulation, down from roughly 30% in mid-2020.
📉 #Ethereum $ETH Balance on Exchanges just reached a 5-year low of 15,098,313.415 ETH
Previous 5-year low of 15,099,982.201 ETH was observed on 01 August 2023
View metric:https://t.co/1dCpD2ey8E pic.twitter.com/TpipEZfhE0
— glassnode alerts (@glassnodealerts) August 11, 2023
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Trading activity dries up
Since the beginning of 2023, exchange supply has progressively reduced, marking a decisive shift in sentiment towards HODLing and staking.
Data from Token Terminal corroborated the aforementioned assertion. After hitting a crescendo in March, monthly ETH trading volumes have fizzled out.
In fact, August started on a much weaker note, recording volumes of just $66 billion as of this writing. If no substantial bullish or bearish event emerges, August could finish up with the dubious distinction of clocking the lowest monthly ETH volumes in 2023.
Source: Token Terminal
Diamond hands stay put
Long-term holders (LTH) have shown less willingness to let go of their ETH stashes. Dormant supply i.e. coins that haven’t moved in a particular time span, have been charging to new highs lately.
According to data from Glassnode, the supply being held for more than two years but less than three years shot up to a 20-month high of 13.1 million ETH.
Source: Glassnode
A cursory glance at historical price charts was enough to reveal the factors driving HODLing for the aforementioned user cohort. Most of these investors acquired ETH during the historic bull market of 2020-21 when ETH reached new highs.
Despite a spirited recovery in 2023, the price of ETH has not risen sufficiently since then. It’s possible that prompted the experienced traders to play the waiting game until the market regains bull momentum.
Read Ethereum’s [ETH] Price Prediction 2023-24
Staking remains a hot trend
However, not everyone was HODLing to wait for the next bull cycle. Some traders took their ETH holdings out of the market and locked them up to generate passive income.
The launch of the Shapella upgrade spurred a new wave of optimism in ETH staking. Staked ETH supply has been hitting new all-time highs (ATH) almost on a daily basis since Shapella went live. The latest update by Glassnode revealed a total of 27.35 million ETH deposited in Ethereum’s staking contract.
📈 #Ethereum $ETH Total Value in the ETH 2.0 Deposit Contract just reached an ATH of 27,353,211 ETH
View metric:https://t.co/SzbMPqvhlb pic.twitter.com/wtQk5gDyqa
— glassnode alerts (@glassnodealerts) August 12, 2023