BeInCrypto takes a look at on-chain indicators for Bitcoin (BTC) and Ethereum (ETH), more specifically those that deal with the amount of coins on exchange balances.
Bitcoin (BTC) exchange balance
The amount of BTC that is held on exchange wallets has been falling since March 2020, when a total of 3,118,057 coins were held in exchange addresses. This value still stands as an all-time high.
An exodus of BTC from exchange balances usually means that the BTC is being transferred to cold storage. Therefore, it is considered a sign of conviction by holders.
Initially, the indicator bounced on Oct 2021 (black circle). Since the BTC price was increasing at the time, this could have been seen as a sign that investors are returning their tokens to exchanges and selling them.
However, the indicator has been falling since and made new lows on March 20 (red circle). Therefore, the current sentiment is back to that of holding. The current value of 2,507,055 is the lowest since Nov 2018.
ETH balance on exchanges
The ETH balance on exchanges has been falling since Aug 2020, when it was at an all-time high of 31,537,628.
The decrease has been very gradual and consistent. It has not been associated with any type of bounce. Rather, ETH has gradually continued to decrease until its current low of 21,677,069.
However, similarly to BTC, the current ETH balance on exchanges is the lowest since Nov 2018.
Conversely, the amount of tokens on smart contracts is currently at an all-time high. This can serve to offset the decrease from exchange balances, since those coins might have gone to smart contracts instead.
Furthermore, this is potentially done as a result of staking in anticipation of ETH 2.0.
For BeInCrypto’s latest Bitcoin (BTC) analysis, click here
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