Ethereum has seen a surge in retail demand since the London Upgrade. The price of the cryptocurrency crossed $3,300 on 14 August, which is the highest level since May 2021. One of the major reasons behind the latest surge in price is the Exchange outflows of ETH.
According to Glassnode, the exchange supply ratio of Ethereum is plunging as the ETH balance on leading crypto exchange has reached 15.3 million Ethereum, which is equivalent to approximately 13% of the total circulating supply and the lowest level on record.
On the other hand, the deposit contract of Ethereum 2.0 saw a jump in the total number of staked ETH. According to the latest data published by Etherscan, the staking contract of ETH 2.0 has more than 7 million Ethereum with a total value of over $22 billion.
“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,” Glassnode highlighted.
Earlier this week, Finance Magnates reported about the latest jump in the daily active Ethereum addresses. The overall network activity of the world’s second-largest digital currency has increased near the $3,000 price level.
DeFi and Ethereum
Moreover, Glassnode highlighted the impact of the growing DeFi market on Ethereum. Most of the users are withdrawing ETH from exchanges to deposit into DeFi projects. “Activity and interest in the DeFi market have found strength this week as capital rotates into Ethereum and governance tokens. ETH has traded and found support above the $3,000 level as the market consolidates after three weeks of strong price performance. The trend of ETH being withdrawn from exchanges and deposited into yield-bearing opportunities in the DeFi space remains a trend to pay attention to,” Glassnode added.
