Though the ratio of a crypto asset's supply on exchanges may not seem to have an immediate impact on prices, the long-term correlations between coins moving away from exchanges while prices move up, is quite evident.
Let's take a look at three ERC-20 assets that are showing this pattern as a volatile week in crypto full of price retracements is coming to an end:
Crypto's #2 market cap asset has seen quite the pullback since its retrace from above $2k last week. However, ETH's supply isn't budging away from offline wallets.
Bancor's supply moving away from exchanges had a lot to do with its ability to hit a 2-year high $6.17 last week. BNT supply is now 71.7% below its one-year average.
KNC's supply has jumped to 39.2% after being as low as 36.1% on January 31st. On the long-term scale, the amount of tokens is still 17% lower than its one-year average.
Sometimes one or two major individual transactions alone are enough to reveal that a whale selloff may send an asset spiraling.
Here are a few assets seeing HUGE transactions the last few days:
Aave - $304M (2/24)
Aave saw its 2nd largest transaction (in USD) this year as a whale AAVE address sent 828.6k tokens to an exchange address.
Prices haven't moved much yet, but historically these kinds of transactions will foreshadow a further price slide when combined with high exchange inflow.
Kyber Network - $26M (2/22)
KNC had a flurry of large transactions Monday, including 13m tokens swapping exchange addresses.
The spike in on-chain transaction volume and exchange inflow has predictably sent KNC downward.
0x Protocol - $44M (2/19)
The 28M ZRX tokens sent from a whale to exchange address marked the highest USD value transfer in the token's 3.5-year history.
Prices have been very volatile since, but it did drop massively during the market-wide correction Monday.
Token Age Consumed has been a steadfast metric our community has relied upon to spot mid to long-term price direction reversals. This extremely useful Santiment metric reveals the amount of tokens changing addresses, multiplied by the time since they last moved.
This metric is often used to spot local tops, but it can also be used to see signs of dormant tokens moving with the intention of pushing UP prices. Some examples of some recent spikes on this metric are given in the following assets below:
Chainlink's pattern of Friday age consumed spikes continued with its largest occurring a couple days ago. Be careful with one occurring at a local top.
Kyber Network ($KNC)
Kyber Network is seeing the beginnings of a rebound, and some major dormant token movement appears to be supporting it!
Without an age consumed spike supporting 0x's price rebound, we're a bit pessimistic about a higher high.
Binance has introduced staking for Kyber. If we see exchange inflow spikes for KNC, it isn't necessary a bad thing, creating strong sell pressure. Binance staking seems hassle free and does not lock up KNC like the KyberDAO, very convenient for users that want to be able to react to market conditions.
This in the long run though, isn't good for Kyber itself, defeating the purpose of staking.