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 hasnโt seen a level this low since ether was in its infancy during the summer of 2016.
Onย theย otherย sideย , during the bull market of 2021, the exchange balance was around 25-26%. Typically low exchange balances are a positiveย 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, stakingโs growing popularity has helped soak up supply from the market.
The introduction of the Shapella upgrade to the Ethereumย (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.
โThis tendency is anticipated to persist, particularly seeingย as that deflationary forces are expected to propel the price of Ether significantly,โ analysts at Binfinex previously shared with CoinDesk. โPrior to this upgrade, potential stakeholders may have been deterred from staking their ether cryptoย tokens owingย to concerns about their funds being locked for an unacceptably long duration.โ
All this comes as cryptocurrency trading volumes decline by double digits.
Binanceย Cryptoย exchange, the worldโs largest digitalย currency exchange, experienced a 48 percent decrease in spot volumeย ofย trading for the Second consecutive 30ย days in April, reaching $287 Billion โ the second-lowest since 2021 โ with its market share likewise reducing to 46%, reflecting a broader 40 percent industry-wide decline owingย to macroeconomic uncertainties and Unitedย States bank collapses.
Ether is asย ofย now trading for $1,816, up 2%, reportsย by CoinDesk market data.
