The amount of Ethereum being held on major cryptocurrency trading platforms has dropped to its lowest level since November 2018, which according to cryptocurrency analytics firm Santiment lowers the “risk of a future major sell-off.”
Cryptocurrency users often move funds off of cryptocurrency exchanges when they plan ot use it on the blockchain or store it in a cold wallet to HODL onto it for the long-term. When funds move into an exchange a sell-off is often expected, while exchange outflows suggest investors are looking to hold onto their coins for more time.
In Ethereum’s case, more investors could be moving their funds off of exchanges in a bid to use decentralized finance (DeFi) applications on the network’s ecosystem. These include lending applications, decentralized exchanges, derivatives trading, and others.
Ethereum is at press time trading slightly above the $2,000 mark after falling from an all-time high above $4,000. The amount of ether on trading platform dropping could mean that the cryptocurrency is holding on above $2,000.
As CryptoGlobe reported, data from Santiment has also shown that Ethereum whales – wallets or clusters of wallets with over 10,000 ETH – have “not budged” during the recent market sell-off that saw ETH’s value drop by over 25% from its all-time high.
Ethereum whales with over $34.3 million worth of the second-largest cryptocurrency by market capitalization barely touched their funds during the sell-off, with only 8 addresses moving out of the category. Funds moving off of exchanges may mean whales are accumulating more.
On the other hand, Ethereum addresses holding between 100 and 10,000 ETH seemingly sold some of their holdings during the downturn, with the number of addresses on this category ultimately dropping to a three-year low.
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