Since the London Upgrade, Ethereum has seen an increase in retail demand.
It’s no surprise that most cryptocurrency markets are bleeding green at the moment. More specifically, all top currencies note another small decline, which further confirms this remains a very uneasy market.
On August 14th, the price of cryptocurrency reached its highest level in more than two years. There are many factors that contribute to this rise including a growing number of platforms offering cryptocurrency trading and merchants accepting it as payment for goods & services.
The significant price surge of ETH was due to the massive outflow of Ethereum from major exchanges.
With Ethereum’s supply ratio declining, Glassnode indicated that the ETH balance on leading crypto exchange has fallen to 15.3 million Ether units or approximately 13% of total circulating supply – a record low for any major cryptocurrency.
In contrast, Ethereum 2.0’s deposit contract saw a jump in the total number of staked ETHs that exceeded 40% as more donors arrived on board.
The data published by Etherscan shows that there are more than 7 million Ethereum with a market value of over $22 billion locked up in the staking contract for ETH 2.0.
It is anything but surprising exchanges converting altcoins to BTC or US dollar see their USD and BTC supply reduce accordingly first and foremost. The Ethereum ratio on the Bittrex exchange is another interesting value to keep an eye on.
This number doesn’t necessarily indicate this trend will remain in place for much longer, albeit it remains to be seen how things will evolve over the next few days. It’s an interesting market trend worth keeping an eye on as we move forward, although it can easily be turned around.
In its statement, Glassnode notes,
“The recent jump in ETH price has been supported by a continued outflow of ETH supply on exchanges. Exchange ETH balances have now declined to reach an all-time low of 13% of the circulating supply this week, equivalent to 15.3M ETH. A reasonable volume of ETH is finding its way into the Ethereum 2.0 staking contract, preparing for the network transfer away from Proof-of-Work and towards Proof of Stake,”
This week, the number of active Ethereum addresses has increased exponentially. The price is now around $3k and it continues to rise at a rapid rate – making this quite an exciting time for enthusiasts!
Impact on DeFi
Glassnode reported that the growing Decentralized Finance (DeFi) market has already begun to affect Ethereum.
According to Glassnode, most users are withdrawing Ether from exchanges and depositing it into DeFi projects instead of keeping their funds on an exchange for longer periods of time. As activity and interest in the DeFi market find strength, capital continues to rotate into Ethereum tokens.
ETH has been trading in a channel around the $3,000 level for three weeks. This week it is consolidating and might continue to rise or fall depending on which direction Bitcoin goes.
One of the most interesting trends in crypto right now is that ETH holders are withdrawing their coins from exchanges and putting them into yield-bearing opportunities like DeFi. This trend has been observed by Glassnode, who said they want to pay attention to it.
