Investors are moving large amounts of Ethereum from centralized exchanges to their own private wallets
According to data from Glassnode, activity on the ETH network is increasing as the price of Ethereum – the second-largest cryptocurrency by market cap – reaches an all-time high above $ 3,500.
#Bitcoin has bounced from correction lows as coins mature, HODLing strengthens and stablecoin supplies hit ATH.#Ethereum also shows market strength as throughput increases, exchanges are drained and DeFi absorbs $ETH.
Read more in The Week On-chain👇https://t.co/0aSkAg1j04
— glassnode (@glassnode) May 3, 2021
Ethereum price represents huge growth on the chain amid the race to make new highs
In its latest weekly report, Glassnode says investors are transferring large amounts of ETH from exchanges to their own wallets.
The report states:
“This week a relatively large volume of ETH was removed from known exchange wallets, spiking to over 200k ETH in a single day. The chart below demonstrates that in 2021, there have been 10 such occurrences with withdrawals of over 200k ETH/day. This compares to only two days with exchange inflows over 200k ETH per day indicating a general preference for self-custody of funds.”
The report states that exchanges currently only hold 12% of the total ETH supply, while smart contracts have 22.8%, showing a spike in interest in the decentralized financial space (DeFi ).
The report said:
“The almost equal and opposite trend for these curves demonstrates a clear product-market fit and demand for DeFi by ETH holders.”
Glassnode said Ethereum is also seeing higher throughput since Ethereum miners adjusted the gas block limit to 15 million, resulting in a drop in gas prices and an increase in transaction volume.
The report states:
“The overall throughput of the Ethereum chain has reached a new all-time high this week of 16.5 transactions per second. The prior all-time-high of 13.5 TPS was set at the peak of the 2017 bull run which has since been eclipsed for the majority of 2021.”
The report adds that the spike in activities is reducing the Ethereum NVT Ratio, a measure of the network’s market cap relative to the volume of USD transmitted on the chain.
The downtrend is often seen as a bullish indicator for the network:
“The chart below shows Ethereum’s NVT trend plummeting since January 2020, especially since the March 2020 sell-off. The recent high transaction throughput also made Ethereum NVT Ratio lower in The past few weeks, showing support for recent constructive price action. ”
You can see the ETH price here.
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