Along with the rise in the price of Ethereum to a new all-time high, interesting trends are also emerging in the behavior of cryptocurrency owners. According to the analytical platform Glassnode, more and more “whales” – that is, large holders of ETH – are taking advantage of what is happening in the market to lock in their profits.
At the same time, the volume of ethers on crypto-exchanges is constantly decreasing and has already reached a minimum in the last 19 months. Let’s figure out what this trend can turn into and what it is talking about in general.
Ethereum is valued at $ 2,127 this morning, up 5.6 percent from a day ago. It is also 1.3 percent below the new all-time high of $ 2,153, which was recorded tonight.
Thanks to the recent leaps in exchange rates, the rise in the value of ETH in a month is equivalent to 28 percent. At the same time, the growth for the year is 1389 percent.
This is noticeably more than the corresponding figure for Bitcoin. The latter is 766 percent.
What’s going on with Ethereum?
On Sunday alone, the amount of ETH withdrawn from crypto exchanges reached $ 560 million. There are currently 14.7 million ETH or the equivalent of $ 30 billion left on cryptocurrency exchanges, accounting for 12.8 percent of the total coin supply. The last time volume fell to such lows was in August 2019, the coin was worth $ 220, or about a tenth of its today’s price.
Moreover, the number of large organizations holding large amounts of Ethereum is gradually decreasing. According to Glassnode, the number of wallets holding over 1,000 coins worth $ 2.057 million hit a three-year low over the weekend. The number of wallets with a balance of 100-1000 coins has decreased to a minimum over the past twenty months, and a similar situation is observed for addresses controlling more than 10 ETH or 32 ETH.
Recall that the last number is the required number of coins to assume the role of a validator in the Ethereum 2.0 network. Users block this amount in the deposit contract and participate in the work of the updated blockchain. And although they cannot yet receive a gradually accumulating reward, this does not stop ETH fans, and the number of coins in staking is becoming more and more.
The most likely reason for this is that large players either fix profits or massively withdraw ETH from exchanges to participate in DeFi protocols. Another option is the usual withdrawal of coins to cold wallets for long-term storage.
Apparently, the most current version of the above is the use of ETH in decentralized protocols. For example, cryptocurrency owners can use it to get loans on the Maker platform or provide liquidity – that is, ensure the availability of coins for trading – on the Uniswap decentralized exchange and earn.
We checked the actual data: over the weekend, Ether volume in DeFi protocols increased sharply and set a new all-time high at 10.77 million coins. This means that users really started their ETH in various projects.
Note that in order to work with DeFi protocols, the cryptocurrency must be kept in your own wallet, and not on the exchange. Therefore, the option of withdrawing ETH from trading platforms and sending them to the niche of decentralized finance is more than likely.
So far, the market itself is near its recently reached peak – a capitalization of $ 2 trillion. According to a trader under the pseudonym Rekt Capital, Bitcoin consolidation will continue below the $ 60,000 line for now, that is, the market is now in a stage of uncertainty.
BTC is still only consolidating in this range. It was this consolidation that helped Ethereum break through to new all-time highs. Perhaps ETH is leading the market while BTC is trying to catch up. So far, a good sign is that the resistance on the chart is unlikely to keep BTC from rising further.
Finally, the last positive factor for the general atmosphere in the cryptosphere is the upcoming IPO of the largest US cryptocurrency exchange Coinbase. It is believed that the entry of a cryptocurrency company of this scale on the stock exchange will positively affect the perception of digital assets among large investors.
We believe that the trend of withdrawing ether from cryptocurrency exchanges is positive. It indicates that investors are not planning to get rid of their own assets – at least now. In addition, they are looking for earning opportunities and experimenting with different protocols from the decentralized finance niche. Accordingly, now the mood of traders is directed towards growth, so it is too early to think about the end of bull run.