The balance of Ethereum (ETH) on the crypto exchanges has now reached a new five-year low. ETH withdrawals from exchanges surpassed in 2023 as investors expect massive upward movement in ETH price.
The move is triggered by an increase in ETH staking, which surprisingly increased after the Shanghai upgrade on April 12. Will the ETH price rise or fall under these circumstances?
Ethereum balance on exchanges drops to 16 million
CryptoQuant data indicates that the total amount of ETH in the crypto exchanges has dropped to critical levels. ETH on exchanges now stands at nearly 16 million, reaching levels not seen since July 2018. It is down 50% since its all-time high.
ETH reserves on crypto exchanges have been declining since mid-2020, but the rate of decline accelerated in September 2022 when the Ethereum network transitioned to proof-of-stake (PoS) with the Merge upgrade.
In 2023 alone, the ETH balance on exchanges fell from 18.5 million to 16 million. The decline will continue as the rate of Ethereum staking increases after the Shanghai upgrade. Etherscan data shows that there are currently 22.98 million ETH worth $41 million wagered on the Beacon Chain.
Ethereum staked on Beacon Chain. Source: Etherscan
Also Read: Binance suspends crypto deposits as Multichain CEO remains missing
Will the ETH price rise or fall?
Typically, low foreign exchange reserves indicate less selling pressure and bullish momentum. Low supply in the market will cause the ETH price to rise.
ETH price is up 2% in the last 24 hours with the price currently trading above the USD 1800 level. The 24-hour low and high are $1782 and $1817 respectively. Volatility remains lower and trading volumes are down after the upgrade, making ETH price more stable.
Also Read: Ethereum Client Releases Major Upgrade to End PoW Support, ETH Price Jumps
Varinder has 10 years of experience in the Fintech sector, with more than 5 years dedicated to blockchain, crypto and Web3 developments. A technology enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in more than 5,000 news stories, articles and newspapers. With CoinGape Media, Varinder believes in the enormous potential of these innovative future technologies. He is currently covering all the latest updates and developments in the crypto industry.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.
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