On-chain data shows the Ethereum Exchange Supply Ratio has continued to move flat around 2016 lows, a sign that may be bullish for ETH. Ethereum Exchange Supply Ratio Has Been At Lows Recently In a CryptoQuant Quicktake post , an analyst has talked about the recent trend in the Ethereum Exchange Supply Ratio. The “ Exchange Supply Ratio ” is an on-chain metric that keeps track of the ratio between ETH’s Exchange Reserve and its total supply in circulation. The “ Exchange Reserve ” here refers to a measure of the total amount of the cryptocurrency that’s currently sitting in the wallets connected to centralized exchanges. When the value of this indicator goes up, it means the investors are depositing their coins to exchanges. As one of the main reasons why holders would transfer to these platforms is for selling-related purposes, this kind of trend can have a bearish effect on the asset’s price. On the other hand, the metric registering a decline suggests a net amount of the supply is exiting from the exchanges. Generally, investors take their coins off into self-custodial wallets whenever they plan to hold into the long-term, so such a trend may turn out to be bullish for ETH. Now, here is the chart shared by the quant that shows the trend in the Ethereum Exchange Supply Ratio over the past decade: As displayed in the above graph, the Ethereum Exchange Supply Ratio hit a peak back in 2020. During this high, the exchanges held more than 30% of the asset’s entire circulating supply. Since then, however, the indicator has been in a constant decline, despite the fact that the asset’s supply has gone up. This means that the investors have pulled out coins at a rate exceeding the supply expansion. This year, the metric has fallen to sideways movement, suggesting an equilibrium has been reached in the sector. Interestingly, this flat action has come despite the price appreciation that Ethereum has been enjoying. The trend would naturally imply that not many investors of the cryptocurrency are ready to part with it yet. At the same time, though, a consistent accumulation like before isn’t happening, either, so it’s not like there aren’t any sellers at all. Nonetheless, the fact that the indicator has at least remained in balance throughout this rally could be a positive sign for its sustainability. The metric could now be to keep an eye on in the future, just to make sure that the trend continues. Any reversals to the upside would, of course, signal that the investors have started to sell, which may mean the Ethereum bull run could be approaching its climax. BTC Price At the time of writing, Ethereum is trading around $3,600, up more than 9% over the last week.
