According to data from Glassnode, the amount of Ethereum on centralized exchanges has reached a five-year low, with 17.8 million ETH on exchanges, representing 14.85% of the network’s total token supply.
This is significantly less than the peak value of 30% reached in the summer of 2020. The decrease in Ethereum balances on exchanges in November and December 2022 followed the FTX collapse, with investors moving their holdings to hardware wallets such as Ledger and Trezor due to contagion fears. The recent decline in Ethereum balances on exchanges in May also coincides with a rise in staking, with the amount of staked ETH increasing from 19.3 million before the Shapella upgrade to 21.2 million. This suggests that staking played a role in exchange withdrawals. The decrease in volatile cryptocurrencies leaving centralized exchanges is sometimes seen as a bullish sentiment among investors, while an influx of cryptocurrencies to exchanges is viewed as bearish.
