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More Than $1 Billion Worth Of Ether Has Been Withdrawn From Centralized Exchanges Over The Past 24 Hours, Making It The Second Spike In 2021

Ethereum, dubbed as the altcoin leader, endured its second massive coin outflow from centralized exchanges in 2021, resulting in $1.2 billion worth of Ethereum (ETH) leaving exchanges towards wallets. The move marks a new record in short-term outflows from exchanges, according to data from IntoTheBlock.

The spike in ETH leaving exchanges managed to create some short-lived speculation about Ethereum’s price, as the second-largest crypto to date reached a high of $3,673.31 before plummeting to a current level of $3,458.14 per ETH.

dd5fb833bdc7cce161092249e571a4daSource: CryptoBrowser

IntoTheBlock also noted that Ether’s price rallied by 60% in the 30 days after $1 billion was pulled from centralized trading platforms in April 2021.

However, the circumstances around the massive ETH exchange outflow differ from those from April 2021, due to the August 5 London network update. London added a burn mechanism into Ethereum’s fee market, creating increased deflationary pressure on Ether’s supply dynamics.

In the 42 days since Ethereum Improvement Proposal 1559 went live, Ethereum’s network burned 309,505 Ether, worth more than $1.1 billion, or 5.05 ETH ($18,061) every minute, worth around $26 million daily since the upgrade.

Ethereum’s top burner is the OpenSea NFT marketplace with its burn rate totaling more than 14% of all ETH that has been removed from the supply. Uniswap v2 is second with a 5.5% share, while Tether and Axie Infinity occupy the next two spots with 4.9% and 3%, respectively.

Ethereum’s exchange outflow is also evident in other projects. Bitcoin, for example, is steadily decreasing its exchange-held BTC since peaking at 17% of its circulating supply in May. Currently, Bitcoin’s exchange balances have returned to 13.1%, which is Bitcoin’s lowest point since February 2018 – right after the first massive Bitcoin craze ended.

Meanwhile, crypto analyst Lark Davis noted that over 10 million ETH has been purchased in the levels between $3,426 and $3,536.

“This is a very significant supply wall for support, but also it is critical to note there is very little supply bought above this level to be dumped when the price starts running,” Davis added.

Furthermore, the team at IntoTheBlock highlighted Ethereum’s relationship with Nasdaq:

“Ethereum appears to be priced as a risk-on bet. $ETH has shown a high correlation to the Nasdaq, which tends to be linked with higher potential/risk investments It is also strongly negatively correlated to the $VIX pointing to the likelihood of a drop in volatile times.“

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