Recent data has revealed a sharp decrease in Ethereum reserves on centralized exchanges, including Binance and Coinbase, as investors prefer self-custody and staking.
Decline in Ethereum Reserves on Exchanges
Over the past two weeks, Ethereum reserves on Binance have decreased by 700,000 ETH, while Coinbase has seen a nearly 900,000 ETH drop. This change correlates with a growing interest among investors in self-custody and holding assets for the long term. Currently, ETH is trading around $4,300, and the reduction in reserves indicates potential scarcity, which might lead to upward price pressure according to market principles.
Optimism in Derivatives Markets
Derivatives data shows that 71.2% of traders are in long positions, which confirms strong but balanced optimism in the market. The long-to-short ratio is 2.47, indicating a continuing bullish trend despite the risks associated with crowded trades. However, current funding rates at 0.0082% suggest that leverage is being controlled.
Revenue Declines Amid Record Prices
Despite record prices for Ethereum, network revenues have dropped by 44% in August to $14.1 million, as reported by Token Terminal. Network fees also decreased by 20% to $39.7 million. Sustained revenue declines raise discussions about Ethereum's long-term economic model, while institutional investments continue to flow into the network.
The decline in Ethereum reserves on centralized exchanges, combined with optimism among derivatives traders, creates a complex dynamic in the market. At the same time, declining revenues raise questions about the market and Ethereum's future as a key player in decentralized finance.
