A Potential Breakout Looms as Ethereum Exchange Reserves Hit a 5-Year Nadir

A Potential Breakout Looms as Ethereum Exchange Reserves Hit a 5-Year Nadir

Ethereum (ETH) is witnessing increased on-chain activity and a surge in demand as its exchange reserves hit a 5-year low. Santiment suggests a significant price breakout due to these factors.

Key Takeaways

  • Ethereum exchange reserves plunge to a 5-year low following a colossal 110K ETH withdrawal.
  • Santiment underscores that Ethereum’s price could be poised for a substantial breakout.
  • ETH becomes a deflationary asset, burning approximately 2.498 million Ether, equating to roughly $8.369 billion.
  • The surge in outflows to self-custodial wallets contributes to Ethereum’s on-chain activity peak.

Ethereum (ETH), the trailblazer in smart contracts and decentralized finance (DeFi) ecosystems, is undergoing a noteworthy uptick in on-chain activity, particularly coinciding with the inception of futures ETFs. The recent data from Coingecko unveils that Ethereum observed a 24-hour trading volume nearing a hefty $7 billion during the early hours of Asian trading this Thursday.

In the wake of Ethereum’s transition to a proof-of-stake (PoS) blockchain, investors, magnetized towards participating in the predominant DeFi ecosystem, have been contributing to its dynamic activity. Subsequent to the EIP 1559 upgrade, Ethereum transitioned into a deflationary asset, incinerating approximately 2.498 million Ether, which is monetarily translated to around $8.369 billion.

Santiment’s Insights on Ethereum On-Chain Activity

Santiment, a prominent crypto market intelligence platform, conveys insights that suggest Ethereum’s price could be teetering on the brink of a notable breakout, propelled by an augmented demand. The platform accentuates that the availability of Ether on centralized exchanges has plummeted to an all-time low, propelled by a substantial rise in outflows directed towards self-custodial wallets.

In a revelation by Santiment’s on-chain analysis tools, about 110,000 Ether was transferred from cryptocurrency exchanges to self-custodial wallets on a recent Wednesday. Subsequently, Ether units held within self-custodial wallets have escalated to an all-time high, clocking in at approximately 115,880,000 ETH out of the present total supply of about 120,241,846 coins.

While the pivot to Ethereum becoming a deflationary asset and the colossal withdrawal from exchanges fuel assumptions of a potential price breakout, it’s vital to approach these projections with a measured perspective. The crypto market, inherently volatile and susceptible to a myriad of micro and macroeconomic factors, can deviate from predictions based on historical and present data.

The sweeping move from exchanges to self-custodial wallets might indeed hint at a larger strategic play by investors in anticipation of a price surge. However, equally plausible are scenarios triggered by unforeseen market dynamics, regulatory shifts, or global economic changes that could reroute Ethereum’s course.


Investors and stakeholders should brace themselves for diverse possibilities, ensuring risk mitigation is woven into their investment strategies as they navigate through the ebbs and flows of the cryptocurrency landscape. The ongoing scenario further underlines the critical necessity for regulatory clarity and advanced security protocols within the ever-evolving crypto industry.