The amount of altcoin Ethereum stored on centralized crypto exchanges has dropped to a half-year low. So, why do ETH funds go to private addresses? Here is the on-chain data…
Leading altcoin leaves exchanges
On May 8, on-chain analytics provider Nansen reported that Ethereum held by exchanges hit a 6-month low. In other words, only 26.5 million ETH centers, worth roughly $49 billion, are on exchanges. Since the beginning of the year, the amount of ETH on exchanges has decreased by about 10 percent. There was also a massive Ethereum migration from exchanges following the collapse of FTX in late 2022. Nansen also reports that Coinbase has the largest share for Ethereum with 31 percent, or 7.91 million ETH. Binance is second with 19 percent, or 4.78 million ETH. Finally, Bitfinex is in third place with 8.3 percent of the ETH balance on exchanges.
So, why are ETHs being withdrawn from exchanges? According to experts, it doesn’t make much sense to leave the coin on an exchange when there are so many return opportunities in the Ethereum ecosystem. Moreover, ETH from exchanges is mostly self-custody, that is, it goes to personal addresses for investors to self-store coins. Another majority of ETHs coming out of exchanges are transferred to staking.
How about staking on Ethereum?
On May 8, analytics provider Glassnode reported where 1.55 million ETH withdrawn from Beacon Chain went. After the Shanghai upgrade, the stock market reported no significant increase in entry volume. Therefore, as predicted, there was no increase in selling pressure following the activation of withdrawals. He noted that after the initial surge in withdrawal requests, staking outs are now declining and stabilizing between 300 and 700 per day. Kraken represented the largest portion of ETH withdrawals at around 32 percent. This is because, cryptocoin.comAs we have also reported, it was an SEC sanction action that resulted in the shutdown of Kraken staking services.
Glassnode noted that Lido, which has not yet enabled withdrawals, is the largest platform to benefit from the Shapella upgrade. Lido currently has a 33.5 percent market share, followed by Coinbase with an 11.5 percent stake provider share. The platform uses the following statements as a result:
Overall, the analysis results show that the Proof-of-Stake mechanics for both incoming and outgoing validators acted as intended, and Ethereum’s consensus mechanism remained stable throughout the process.
ETH price outlook: What’s next?
Despite the low selling pressure that followed Shapella, ETH prices slumped in the shadow of their big brothers. ETH prices fell 1.2 percent on the day to $1,842 at the time of writing. The asset briefly reached $2,000 over the weekend but resistance proved very strong. ETH is down 13.4 percent since its 2023 high and is down 62.2 percent from its all-time high. Support is currently located just above $1,800 on the short-term time frame.
