Ethereum supply on exchanges has bottomed before the upcoming hard fork.
As the expected London hard fork on the Ethereum network approaches, crypto market analysts are noticing some interesting developments regarding the Ether (ETH) supply. According to data from on-chain analytics firm CryptoQuant, the amount of Ether held in cryptocurrency exchanges’ reserves has suffered the biggest daily drop since the beginning of July.
To determine whether it is bullish or bearish for the largest altcoin status currency, it is easy to learn about the market by looking closely at factors playing a role in Ether demand, including Eth2.0 staking contracts, increased decentralized finance transactions, and traders.
The amount staked for Eth2 exceeded 6 million ETH
Eth2 staking contracts, which exceeded the 6 million Ether limit on June 30, are cited as the source of the increased demand for Ether.
Data from CryptoQuant says that on July 1, more than 596,000 Ether exits from exchanges, the highest level since January 21.
The latest data provided by Eth2 Launchpad shows that the current amount staked is 6,166.661. This shows that not all Ether withdrawn from exchanges is staked.
DeFi values are rising
Another possible reason for Ether to be removed from exchanges could be the decentralized finance ecosystem, which is seeing an increase in token values alongside the total value locked in DeFi protocols.
Ether and Bitcoin (BTC) hold most of the asset currently locked in DeFi, while prices have remained relatively unchanged over the past week. It means that the increase in the total amount of locked assets seen on July 8 may have been due to increased token values. Balances remained stable, based on deposit and credit data provided by Dune Analytics.
Traders excited before London hard fork
Unlike the increase in the amount of Ether coming out of the exchanges, the upcoming London Hard Fork and EIP-1559 updates also increase the level of excitement.
Several analysts think that the move to the more environmentally friendly Proof of Stake (PoS) consensus algorithm, as well as the new “scarcity” feature that will reduce the number of tokens in circulation, will positively affect the price of Ether.
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