Emily Walker
Recent on-chain data indicates that the Ethereum Exchange Supply Ratio has remained stable, hovering around the lows seen in 2016, which could signal a bullish outlook for ETH.
Current Status of Ethereum Exchange Supply Ratio
An analyst from CryptoQuant discussed the latest developments in the Ethereum Exchange Supply Ratio in a recent post. This metric measures the proportion of ETH held in centralized exchange wallets against its overall circulating supply.
Here, the term “Exchange Reserve” refers to the total quantity of Ethereum stored in wallets belonging to centralized exchanges.
When this ratio rises, it typically indicates that investors are moving their coins onto exchanges, often to sell them, which can exert downward pressure on prices. Conversely, a declining ratio typically suggests more ETH is being withdrawn from exchanges, as investors prefer to store their assets in personal wallets for long-term holding. Such a trend is generally viewed as bullish for ETH.
The following chart illustrates the Ethereum Exchange Supply Ratio’s trajectory over the last ten years:
The chart reveals that the Ethereum Exchange Supply Ratio peaked in 2020, at which point exchanges held over 30% of the circulating supply. However, since then, this metric has been on a steady decline, indicating that withdrawals are outpacing the increase in supply.
This year, the ratio has stabilized, showing a balance in the market despite Ethereum’s price gains. This flat movement suggests that while not many investors are inclined to sell right now, there isn’t significant accumulation happening either.
Still, the fact that this ratio has remained steady during the recent price rally could bode well for the market’s health in the long run. Observing how this metric behaves in the future will be essential to gauge ongoing trends.
If the ratio were to increase again, it might indicate that investors are beginning to sell off their assets, potentially signaling that the current Ethereum bull run is nearing its peak.
Current ETH Price
As it stands, Ethereum is trading at approximately $3,600, reflecting a rise of more than 9% over the past week.