Ethereum’s price has been climbing, but a closer look at on-chain data reveals a potentially bullish underlying trend. The Ethereum Exchange Supply Ratio is hinting at a strong market.
What’s the Exchange Supply Ratio?
The Exchange Supply Ratio is a key metric that tracks the percentage of all Ethereum (ETH) held on centralized exchanges. A high ratio means lots of ETH is sitting on exchanges, often a sign that people are preparing to sell. A low ratio, conversely, suggests people are holding onto their ETH, potentially a bullish sign.
ETH on Exchanges: Near Historic Lows
Recently, the Exchange Supply Ratio has been hovering near its lowest point in years, similar to levels seen back in 2016. This means significantly less ETH is on exchanges compared to its total supply. This is happening despite Ethereum’s price increasing.
The Chart Speaks Volumes
[Imagine a chart here showing the Exchange Supply Ratio over time, peaking around 2020 and then declining to current low levels].
As you can see, the ratio peaked in 2020 when exchanges held over 30% of all ETH. Since then, it’s steadily dropped, even as the total supply of ETH has increased. This indicates that investors are withdrawing ETH from exchanges faster than new ETH is being created.
What Does This Mean for Ethereum?
The current sideways movement of the ratio suggests a balance between buyers and sellers. While there isn’t a massive accumulation of ETH like before, the fact that the ratio hasn’t spiked upwards during this price rally is a positive sign. It suggests that investors aren’t rushing to sell, which could indicate the current bull run has some staying power.
Keeping an Eye on the Future
This low Exchange Supply Ratio is definitely worth watching. Any significant upward movement would signal increased selling pressure, potentially suggesting the bull run is nearing its end. For now, though, the trend is looking good for Ethereum.
Current Ethereum Price
At the time of writing, Ethereum is trading around $3,600, a more than 9% increase over the past week.
