ETH Scarcity in Exchanges ahead of Eth2 Phase 0 Launch
The amount of ETH held across cryptocurrency exchanges has fallen to a two-year low, data from Santiment reveals. In 14 days, assuming conditions are met, the Ethereum network will begin transiting to a Proof-of-Stake consensus algorithm, preferring staking to mining. In this arrangement, participants would delegate their coins to a validator, or run a validator node themselves, earning a decent yield.
Ethereum is transiting for efficiency and scalability reasons. Amid this transition, ETH coins are flowing out of centralized exchanges. Several reasons explain this observation. First, the path to Serenity starts in a few days--a week to be precise. If conditions are met, Phase 0 of Eth2 will be activated. Second, in light of this development, assuming Nov 24 conditions are true, odds of ETH prices rallying remain high. Therefore, rather than holding coins in non-custodial wallets, users now prefer to not only control coins but even dabble with DeFi as a diversification strategy.
Impact on the ETH Price:
Bullish. Inflow and outflow of coins to/from exchanges reflect the general sentiment on the price. The more the outflow, the higher the confidence as there are many holders than possible sellers. This has a net effect on price, helping reduce sell pressure, propping bulls. That there are few ETH coins in leading exchanges ahead of a critical fundamental event in a few days is massive for prices.
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