The fall comes as the number of staked ether has surged.
The number of ether (ETH) on exchanges has hit a low not seen since July 2016 as staking saps up available ether.
Data from Glassnode shows that as of Thursday, 14.85 percent of all ether was held in wallets owned by centralized exchanges. The market hasn’t seen a level this low since ether was in its infancy during the summer of 2016.
On the other side , during the bull market of 2021, the exchange balance was around 25-26%. Typically low exchange balances are a positive tendency sign as it means the supply of ether available for buy is limited, thus, it puts pressure on prices to increase.
In the last few weeks, staking’s growing popularity has helped soak up supply from the market.
The introduction of the Shapella upgrade to the Ethereum (ETH) network has triggered a surge in ether staking, with over 4.4 Million additional coins deposited since the upgrade, as large ether holders increasingly opt for generating passive income rather than liquidating their assets.
“This tendency is anticipated to persist, particularly seeing as that deflationary forces are expected to propel the price of Ether significantly,” analysts at Binfinex previously shared with CoinDesk. “Prior to this upgrade, potential stakeholders may have been deterred from staking their ether crypto tokens owing to concerns about their funds being locked for an unacceptably long duration.”
All this comes as cryptocurrency trading volumes decline by double digits.
Binance Crypto exchange, the world’s largest digital currency exchange, experienced a 48 percent decrease in spot volume of trading for the Second consecutive 30 days in April, reaching $287 Billion – the second-lowest since 2021 – with its market share likewise reducing to 46%, reflecting a broader 40 percent industry-wide decline owing to macroeconomic uncertainties and United States bank collapses.
Ether is as of now trading for $1,816, up 2%, reports by CoinDesk market data.