Visit DailyCoin for more articles
2021 can be considered a good year overall for Ethereum, which has gained in value by more than 450% year-to-date. Regardless of Ethereum’s strong performance this year, exchange outflows of Ether have fallen to a four-year low.
According to data from Glassnode, ETH exchange outflows are now at their lowest point since January 2018. Exchange outflows show the amounts of a token that have been withdrawn from exchange wallets across a given period.
Exchange outflow has long been used as an indicator for determining trends in the crypto market. Although investors see low exchange outflow as a precursor to a bearish trend, Ethereum’s situation may just be the outlier many hope it is.
Exchange Outflows Decline as ETH Price Increases
What is interesting about Ethereum’s declining outflows is that it correlates with an increase in the price of Ethereum.
On-chain data from CryptoQuant confirms that ETH exchange outflows have steadily dropped throughout the year.
Graph showing Ethereum’s derivative exchange outflows from January 1st, 2021, to December 27th, 2021 (Source: CryptoQuant)
Relating to the correlation, Ethereum holders who had expected a major rally in the wake of November’s ATH could be moving their stakes off exchanges, potentially contributing in large part to the decline.
The world’s largest crypto, Bitcoin, is also experiencing a similar trend. According to on-chain data, the amount of BTC being held on exchanges has dropped to 1.3 million, or 6.3% of Bitcoin’s total supply.
On the Flipside
- Since ETH outflows have hit their four-year low, the price of the Ether has dropped by 4%, and is now trading at $3,919 as of this writing.
The 24 hour price chart for Ethereum (ETH). Source: Tradingview
Why You Should Care
Many investors have decided to HODL rather than sell their coins amidst predictions of explosive growth for the crypto industry in 2022.
Follow DailyCoin:
Homepage| Twitter | Facebook | Linkedin | Youtube
