The number of native Ethereum (ETH) tokens held on cryptocurrency exchanges has fallen to its lowest level since September 2018, indicating the intent of traders to hold on to the token in hopes of a price increase in 2022.

Specifically, according to data provided by Glassnode, around 550,000 ETH tokens worth around $1.61 billion have left the central marketplaces this year. The massive influx boosted the exchange’s net ETH balance to 21.72 million ETH from an all-time high of 31.68 million ETH in June 2020.

Ethereum balance across all exchanges as of March 18, 2022 Source: Glassnode
Biggest weekly ETH flow since October 2021
Interestingly, according to IntoTheBlock, more than 30% of all Ether withdrawals from exchanges in 2022 occurred earlier this week. Specifically, over 180,000 ETH left crypto exchanges on March 15, bringing the weekly inflow as of March 18 to just over $500 million.

Net exchange flows of Ethereum. Source: IntoTheBlock
Chain analysis data showed similar readings, showing that the Ether coin could exit the exchange this week, averaging around 120,000 units per day, which is a bullish sign. Excerpts:

“Assets held on exchanges increase if more market participants are willing to sell rather than buy, and if buyers choose to keep their assets on exchanges.”
IntoTheBlock offers a similar bullish perspective, citing a fractal from October 2021 when the price of Ether surged 15% ten days after the Ethereum network detected a massive withdrawal of ETH from central crypto exchanges.

The Ethereum Supply Crisis Continues
IntoTheBlock noted that the increase in the withdrawal of Ether from exchanges this week coincided with the movement of about 190,000 ETH to Lido “lido stith” pools.

In summary, Lido is a silent staking service that allows users to overcome the challenges associated with staking on the Ethereum 2.0 beacon network, including the requirement to wager a minimum of 32 ETH or multiples thereof. In addition, Lido proposes to solve the capital efficiency problem by issuing stETH, a tokenized version of stacked ETH.

Over the past 30 days, Ethereum holders have revealed that over 1 million ETH has been added to the Ethereum 2.0 contract. As the protocol prepares to move fully to Proof of Stake over the summer — following a “merger” earlier this week on the Kiln testnet — the likelihood of more Ether tokens leaving the active supply has increased.

ETH Price Continues to Rise
The optimism surrounding the Ethereum swap prompted Ethereum to enter bounce mode this week.

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In particular, the price of ETH has risen by more than 17% in a week and has approached $3,000. Interestingly, a bullish trend rebound appeared at the technical level – an uptrend support line with a recent history of capping the bearish outlook for Ethereum, as shown in the chart below.

Daily ETH/USD price chart. Source: Trading View
However, as Cointelegraph previously reported, Ethereum could cut gains due to another technical level, this time retreating from trendline resistance, which has also helped limit upside attempts since January 2022.

Together, these trendlines seem to have formed a continuation pattern called a symmetrical triangle, which indicates that Ethereum is likely to move in the direction of its previous trend, i.e. down. At the moment, ETH may retreat to the triangle support trend line in case of a pullback from resistance.

Source: CoinTelegraph