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Despite the general decline in the crypto markets, some tokens are doing better than others. One of them is Ethereum, which has been outperforming many other altcoins recently. At the same time, on-chain indicators show growing investor confidence.
On Tuesday, February 18, Ethereum was trading at $2,620, down 3% in the last 24 hours. In that same period, other major altcoins saw significantly worse performance. For instance, XRP was down 4% Cardano 6%, and Solana shed 7% in value.
The same day, data from the crypto analytics platform Santiment showed bullish signs for Ethereum. In particular, on-chain data shows that traders moved 0.83% of the total ETH supply from exchanges in the past two weeks.
📈 Ethereum has shown mild signs of a rebound, currently back up to a market value of $2,745 and outpacing most altcoins to start the week. From a long-term perspective, ETH continues to move off of exchanges and into cold wallets at a shocking pace, with just 6.38% of the… pic.twitter.com/4MTJgpOLDT
Currently, just 6.38% of Ethereum’s total supply is on exchanges, which suggests a bullish long-term outlook. At the same time, Santiment revealed strong social signals for Ethereum. Notably, according to the platform, Ethereum accounts for 9.2% of conversations about crypto on social media.
When traders expect to hold their tokens for a long time, they prefer to keep them in the self-custodial wallet. Institutional investors, on the other hand, opt for crypto custodial services. In both cases, these methods are much safer than exchanges, which are exposed to hacks or mismanagement. Most prefer cold storage, as it adds an additional layer of security.
For that reason, when traders move their money from exchanges, this is a bullish long-term signal for the token. It indicates that investors are taking a long-term view of the token. As long as the tokens stay in storage, they are effectively out of the circulating supply.
This move offsets some of the inflationary pressures that Ethereum has been facing since the Dencun update. Notably, since March 2024, Ethereum’s inflation has been trending steadily up. According to Ultrasound Money, Ethereum’s yearly inflation rate was 0.556% in the last 30 days.
Long-term growth will depend on how Ethereum tackles its inflation problem. Still, metrics suggest that after almost a year of underperformance, Ethereum is finally getting some attention from traders.
READ MORE: Solana DEX Leader Ben Chow Resigns After LIBRA Controversy
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