On September 16, $1.2 billion in ETH was withdrawn from centralized exchanges, and the daily outflow reached a new high

More than $1 billion worth of ether moved out of centralized exchanges within 24 hours, leading to speculation that ether's price is about to rise as supply dwindles across many trading venues.

According to data shared by encryption analysis provider IntoTheBlock, on September 16, $1.2 billion worth of ETH was withdrawn from centralized exchanges, setting a new record for short-term capital outflows from exchanges.

IntoTheBlock noted that in the 30 days since $1 billion in ETH was withdrawn from centralized trading platforms in April, the price of ether rose 60%.

The amount of net ETH flowing out of exchanges just set a new record

Over $1.2 Billion worth of ETH left centralized exchanges yesterday

The Last Time Over $1 Billion in ETH Left a CEX, Ethereum Gains 60% in 30 Days

— IntoTheBlock (@intotheblock) September 17, 2021

Since April, however, things have changed. Last month’s London upgrade introduced a burn mechanism in ethereum’s fee market, putting more deflationary pressure on ethereum’s supply dynamics.

According to Ultrasound Money, at the time of writing, 309,505 ETH worth more than $1.1 billion have been burned in the 42 days since EIP-1559 went live. Thus, since the London upgrade, Ethereum’s supply has decreased by about 5.05 ETH ($18,061) per minute, or $26 million per day.

The supply of Ethereum on exchanges keeps dropping while the price keeps going up. $10,000 is already in the works.

— Lark Davis (@TheCryptoLark) September 17, 2021

Booming NFT marketplace OpenSea is the leading DApp on Ethereum with a burn rate of over 14% of all ETH removed from supply, followed by Uniswap V2 (5.5%), Tether (4.9%) and Axie Infinity (3 %). Ethereum transfers also drove an 8.7% ETH burn rate.

Bitcoin supply on exchanges has also seen steady outflows since peaking at 17% in March 2020.

BTC reserves on centralized exchanges have fallen to their lowest levels since February 2018, according to data from on-chain analytics firm Glassnode.

Exchange Bitcoin balances have recovered to 13.1% of Bitcoin’s circulating supply, back to February 2018 levels.

The all-time peak for exchange balances was 17%, when Bitcoin was right at the bottom of the March 2020 sell-off.

The trend changed that day.

— Yann & Jan (@Negentropic_) September 15, 2021

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