Although Ethereum is the backbone for the rapidly growing decentralized financial ecosystem, the cryptocurrency has fared significantly worse than Bitcoin Trader in recent weeks.
This so-called underperformance is due to the fact that its price remains below its 2020 highs, while BTC is trading at its highest level after its parabolic uptrend in 2017.
While the price development was not overtly bullish, ETH remains incredibly strong from an in-chain and fundamental perspective.
The transition to ETH 2.0 is already underway – users are sending tens of thousands of tokens to the staking contract – and the network is being used in high volumes due to the resurgent DeFi trend.
Probably one of the most bullish on-chain metrics is the small amount of Ethereum held on the exchanges – it has just hit its lowest level since 2018.
This metric at a multi-year low shows that the selling pressure to which the cryptocurrency can be exposed is limited for the time being.
Ethereum is consolidating below 2020 highs, but the outlook remains good
At the time of writing, Ethereum is trading over 3 percent higher at a current price of $ 465, which is roughly the price it was trading at in the past few days.
ETH is still below the highs of just under $ 500 in 2020, which were reached a few months ago during the high phase of DeFi mania.
However, Ethereum is well above the lows of around $ 310 set after the mania subsided and the broader market gave way.
The price hike has been surprisingly slowed lately, despite the impending release of the 2.0 network upgrade, widely viewed as a bullish catalyst.
The ETH balance on crypto exchanges is at a multi-year low
One on-chain metric that works in favor of the bulls is that the amount of Ethereum on exchanges hasn’t been that low since 2018.
Analysis company Santiment writes about it in an article and explains that only 13.35 percent of the total ETH supply is held on stock exchanges.
“The percentage of the entire ETH offering that is held on exchanges today (13.35%) has not been that low since November 23, 2018. The milestone, almost exactly two years ago, is a positive sign for the owners of #Ethereum, who in the past have benefited from keeping the supply on exchanges low. It suggests that the likelihood of large whales being sold out will remain limited … „