The push for etherium supply is increasing as exchange reserves continue to decline and the value of the ETH 2.0 contract increases.
Etherium Supply Shock: Exchange Reserves Decline as ETH 2.0 Stacking Contracts Rise
As indicated by a CryptoQuant post, ETH exchange reserves are declining while coins locked in stacking agreements are increasing.
“All Exchange Reserve” is an Etherium indicator that shows the total number of coins stored in the wallet of all exchanges.
When the value of this metric increases, it means that the supply of ETH on the exchanges increases. Such a trend may indicate that there is selling pressure in the market as investors are sending these currencies to exchange to buy Fiat or Altcoin.
On the other hand, the decline would mean that ETH’s supply is declining as investors stop huddling or selling their cryptocurrencies through OTC deals. This behavior may show that buyers are excited about the future of the currency.
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Now, here is a chart showing the trend of all exchange reserves for ETH:
The indicator's value looks to be decreasing while ETH 2.0 total value staked is moving up | Source: CryptoQuant
As the graph above shows, the etherium exchange reserves have been steadily declining for some time.
This is despite ETH’s recent price increase. It seems investors are willing to hold on because they believe the price will appreciate even more.
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This is creating a supply shock in the market. Rising demand for large whales, such as institutional and retail investors, could now push up prices.
Indeed, on-chain data suggests that institutional investors have already begun to engage in crypto since the 400k ETH came out of the crypto exchange coinbase a few days ago.
However, the previous chart includes the values currently in ETH 2.0. As the number of coins locked in this deal continues to grow, it seems that some of the supplies that have been shut down in the exchange are going into this deal. This further supports the notion that investors are in the etherium in the long run.
At the time of writing, the price of etherium is around $ 3.8k, up 5% in the last seven days. In the last one month, the crypto price has gained 9%.
The chart below shows the trend of currency prices in the last five days.
ETH's price has moved rather sideways in the last few days | Source: ETHUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com