Ethereum massively outflows from exchanges ahead of The Merge upgrade

Ethereum on exchanges hit a four-year low alongside steady inflows into the network’s staking contract ahead of The Merge. The market cap of the second-largest cryptocurrency has rallied by more than 34.5% over the past week, reaching nearly $199 billion.

On July 21, Ethereum (ETH) held on exchanges hit a 4-year low following record staking figures on Ethereum 2.0, the network’s incoming upgrade.

According to analytics platform Glassnode, centralized exchanges currently hold 19.09 million Ethereum, a metric which was just under 20 million in July 2018, data suggests.

Furthermore, Ethereum held on exchanges has plummeted by 10% from 21.191 million over the past five days.

These data points were also firmed up with high outflows from exchanges recently.

Exchange outflows hit a 13-month high, as Glassnode reported, indicating less interest among investors to trade or hold the asset on centralized exchanges.

Blockchain tracking and reporting platform Chainalysis reveled similar data: “The change in ETH held on exchanges experienced the largest one-day decrease in 202 days, decreasing by 432.84k ETH to 249.58k ETH.”

The sharp decline in Ethereum held across exchanges is likely a result of the growing amount of Ethereum staked as the network prepares for its biggest upgrade yet.

Unlike the current Ethereum network, Ethereum 2.0 is a proof-of-stake (PoS) network where validators stake 32 Ethereum to verify the network’s integrity.

Ethereum staked on the Beacon Chain, a PoS version of Ethereum that launched in December 2020, has been steadily increasing over the past few days too.

The Merge is expected on September 19, an event which will see the current mainnet merge with the PoS version, and today the total amount staked currently sits at 13.14 million via a total of more than 410,000 different validators.

Amid these bullish moves, Ethereum has jumped 8.6% over July 22 reaching $1,645. The second-largest cryptocurrency with a market capitalization of nearly $199 billion, has rallied over 34.5% over the past week.