On-chain data from Santiment shows the Ethereum supply on exchanges has dropped by 37% since the Merge in September last year. Ethereum Supply On Exchanges Has Continued To Decline Recently As per the on-chain analytics firm Santiment, ETH continuing to leave exchanges can be good news for the cryptocurrency. The “supply on exchanges” is an indicator that measures the total amount of Ethereum that’s currently sitting in the wallets of all centralized exchanges. When this metric’s value increases, investors transfer a net number of coins to exchanges. Since one of the main reasons holders may deposit their coins to exchanges is for selling purposes, this trend can have bearish implications for the asset’s price. On the other hand, the indicator observing a decline suggests that a net amount of supply is leaving these platforms currently. As the exchange supply can be considered a sort of available “selling supply” for ETH, its value decreasing can naturally be bullish for the coin. Related Reading: Here’s What’s Needed For The Bitcoin Rally To Resume Now, here is a chart that shows the trend in the Ethereum supply on exchanges over the last few months: The value of the metric seems to have sharply gone down in recent days | Source: Santiment on Twitter As shown in the above graph, the Ethereum supply on exchanges measured around 19.12 million ETH back on the 14th of September 2022, the date of the much-hyped Merge, which successfully transitioned the network consensus mechanism to a proof-of-stake (PoS) one. Since then, the indicator has observed a significant decline, leading to the number of exchanges still left today being just 13.36 million ETH. Regarding capital loss, today’s exchange supply is worth about 37% less than it was during the Merge. Related Reading: Bitcoin NUPL Retests Key Support, Will BTC Rebound? And in terms of the pure difference in the total number of coins, these platforms today hold about 30% less Ethereum supply than on the date of the PoS upgrade. Santiment thinks this is good news for the Ethereum market, as the available selling supply has continuously shrunk in recent months. The chart shows that the most drastic drawdown in the indicator came following the collapse of the crypto exchange FTX. The reason behind that is a known platform like FTX going belly up renewed fear around centralized exchanges among investors, pushing them to take their coins to offsite wallets. The price of Ethereum has registered a decline in the past week. Still, as is visible in the graph, the Ethereum supply on exchanges has seen a noticeably sharper decline following this price dip, which may be a sign that investors are accumulating more while ETH is at a “discount.” ETH Price At the time of writing, Ethereum is trading around $1,500, down 8% in the last week. It looks like the value of ETH hasn't moved much in the last few days | Source: ETHUSD on TradingView Featured image from Jievani Weerasinghe on Unsplash.com, charts from TradingView.com, Santiment.