- This happened despite ETH’s total supply in profit hitting 94.87% at press time.
- As the liquid supply shrinks, investors might have to shell out more to purchase coins.
More than $900 million worth of Ethereum [ETH] was withdrawn from centralized exchanges over the week.
According to on-chain analytics firm IntoTheBlock, this marked the eighth consecutive week of net outflows, causing a sharp reduction in the crypto’s “available to buy” supply.
ETH holders not interested in selling
Typically, spikes in exchange outflows imply a short-term accumulation trend, likely motivated by expectations of higher returns in the future.
As the liquid supply shrinks, investors might have to shell out more to purchase coins, therefore making such occurrences as bullish events.
The recent accumulation trend was interesting, given that ETH’s total supply in profit has sharply increased in the past month, standing at 94.87% as of this writing, AMBCrypto’s examination of Santiment’s data revealed.
This suggested that investors were resisting the temptation to sell in hopes of multiplying their gains in the long term.
Source: Santiment
However, AMBCrypto noticed a sharply declining graph for the number of addresses with a minimum of 1k coins, according to Glassnode’s data. This suggested that not all coins moved out of exchanges were sitting dormant in cold wallets.
So where were they going?
Source: Glassnode
More ETH gets staked
The total number of ETH staked into Ethereum’s deposit contract swelled up to 40.39 million as of the 1st of March, as compared to an exchange balance of just 13.18 million.
The sharp divergence between the two was glaring, implying that ETH holders were putting their coins into staking and restaking projects.
The biggest takeaway from these trends was that investors were prioritizing guaranteed, stable returns over risk-laden market trading.
Source: Glassnode
High fees attract validators
Another compelling reason to stake and become an Ethereum validator was the prospect of high fees. Over the week, validators collected $108.3 million in gas fees, a jump of 43% from the previous week, as per IntoTheBlock.
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Note that while rewards for proposing a block accrue on the validator, the fees from the transactions within that block are available to the validator right away.
As of this writing, the second-largest cryptocurrency was trading at $3,442, having grown 16% in the past week, according to CoinMarketCap.