Amidst the bulls and bears in the crypto market over the past week, the circulating supply of Bitcoin (BTC) and Ethereum (ETH) have hit record lows, fueling speculation about the potential impact on the market cryptocurrency.

Details available at Santiment reveals a significant decrease in the amount of BTC and ETH on exchanges, suggesting a change in investor behavior.

Bitcoin And Ethereum Supply Plummets On Exchanges

According to Santiment data, the circulating supply of BTC on exchanges is currently only 5.7%, which represents the lowest level since December 2017 when the cryptocurrency rose to an all-time high of $20,000.

Similarly, the supply of ETH on exchanges fell to 10.1%, the lowest number since its establishment in 2015. This trend shows that crypto investors are actively buying and withdrawing their coins from exchanges, choosing storage methods alternate.

Santiment tweeted earlier today:

Bitcoin & Ethereum continue to quietly watch more and more of their current supplies move into self-containment. Although not a perfect indicator, falling bases on exchanges tend to hint at a future bull run, given enough time.

In particular, oThe main reason for the decrease in the supply of BTC and ETH on exchanges, especially in the case of Ethereum, is the increasing demand for the stake. Ethereum 2.0’s transition to a proof-of-consensus (PoS) mechanism allowed ETH holders to stake their coins and participate in securing the network while earning rewards.

Bettors lock their ETH in a specialized wallet, ensuring their active participation in the network’s operations rather than leaving it idle on exchanges. This shift towards betting is motivated by the desire to earn passive income and contribute to the long-term growth and security of the Ethereum ecosystem.

On the other hand, the decline of Bitcoin on exchanges is not so obvious, however, the possible reason can be attributed to investors who want to keep their BTC holdings for a long time. This could be due to the looming global recession, which has turned many to the idea of ​​saving funds for «rainy days».

Implications for the Crypto Market

The decline in supply of Bitcoin and Ethereum on exchanges could have significant implications for the broader cryptocurrency market, which could be largely positive. Firstly, it suggests that the selling pressure is reduced as there are fewer coins readily available for trading. This «hints at a future bull run,» according to Santiment.

With limited supply on exchanges, potential buyers may find it more difficult to acquire these digital assets, leading to increased demand and the potential for both Bitcoin and Ethereum prices to rise.

Additionally, the reduced presence of BTC and ETH on exchanges could indicate growing confidence among long-term holders. Investors are likely to be inclined to keep their coins in a secure wallet or take part in betting, indicating that they believe in the potential and future appreciation of these currencies.

This change in behavior reflects a maturing market where participants are focusing more on the underlying technology and long-term prospects rather than short-term trading.

Regardless, BTC and ETH haven’t made any significant moves in the past week. BTC’s price experienced a small up trend with 0.3%. BTC rose from a low of $26,819 seen last Saturday to trade as high as over $27,000 on Thursday.

In contrast, ETH’The price has increased by 0.6% in the last week. ETH has risen from a low of $1,795 last Saturday to trade above $1,800 at the time of writing.

-Featured image from Shutterstock, Chart from TradingView