ETH exchange balances decline as prices swing

Ethereum coins held on crypto exchanges have fallen over the past six months, even as their price has dropped by more than 40% since their October highs.

According to a X post, the market sentiment analysis platform Santiment found figures from Sanbase showing that July was the period’s high for exchange-held Ether, with 12.31 million ETH sitting on trading platforms. That balance steadily dropped for the latter half of the year and now sits at 8.15 million ETH, according to the firm.

The decline comes as more holders move coins into staking, while price action is subdued, Santiment analysts said. Ether has been trading in a narrow band over the past week, ranging from $2,801 to $3,034.

Ether exchange reserves slide through January price turbulence

According to CryptoQuant’s chart tracking “Ethereum: Exchange Reserve” on all exchanges in the last 30 days, reserves have been consistently sliding downwards as Ether’s price swung between early-month highs and late-month lows.

Exchange reserves started the period near 16.72 million ETH around December 30, before climbing to 16.84–16.85 million by the turn of the new year. Traders reversed that early spike by January 5, leaving back reserves of about 16.62–16.63 million. They slipped further again during the next day to around 16.55 million.

Ether holdings on exchanges then stabilized briefly before rising back towards 16.67–16.71 million between January 9 and 11. The downtrend resumed by mid-month from 16.60 million around January 13 to about 16.41 million just 10 days ago.

The steepest break came at the start of last week, when exchange reserves hit 16.33 million, the lowest level of the month. A modest rebound saw reserves recovering to around 16.40–16.42 million between January 21 and 24, then resumed falling into the month-end.

In the month’s last business week, exchange coins trended down almost continuously, slipping from 16.33 million to about 16.26 million as of Thursday. That late-month reading sits close to the chart’s lower bound of 16.25 million.

Ethereum staking queue swells, validator exit line thins

Santiment’s analysis noted that reserves previously held by exchanges could be moving to staking pools, which aligns with its theory of a crowded pipeline of staking entries. According to the Ethereum Validator Queue, the entry line was heavily backed up with about 3.6 million ETH waiting to be staked on Thursday. 

The predicted waiting times to enter a staking pool at that pace are 63 days and 20 hours. On the other hand, the far smaller exit queue has about 44,448 ETH waiting to leave on an estimated 18-hour wait.

Staked Ether now exceeds 36 million tokens, which is about 29% the total supply, according to beaconcha.in and Dune Analytics. “As staking continues to be of strong interest, especially while markets move sideways, exchange supply will continue to shrink as well,” Santiment’s analysts wrote on X.

Some corporate and large-wallet activity has also moved ETH away from exchanges and into longer-term positions. Lookonchain reported that the ETH treasury firm BitMine Technologies has staked another 250,912 ETH from its holdings. The crypto market transactions-tracking platform estimates that BitMine has now staked more than 2.5 million ETH, 61% of its total stash.

Separately, Lookonchain said four staking wallets withdrew more than 26,000 ETH from Binance on Tuesday. The analytics firm suggested that those wallets were accumulating Ether at the dip, in line with the cooling of trading activity on exchanges over the last three months. 

Ether’s trading volume on CoinMarketCap was about $23.54 billion on Thursday, down from more than $27 billion a day earlier.

The smartest crypto minds already read our newsletter. Want in? Join them.