Despite Ethereum being the backbone for the rapidly growing decentralized finance ecosystem, the cryptocurrency has been severely underperforming Bitcoin throughout the past few weeks.This underperformance comes as its price remains below its 2020 highs, while BTC is trading at the highest levels seen in the time following its parabolic uptrend in 2017.Although its price action has not been overtly bullish, ETH remains incredibly strong from an on-chain and fundamental perspective.The transition to ETH 2.0 already underway – with users sending tens of thousands of tokens to the staking contract – and the network is being used in heavy volumes due to a resurgence in the DeFi trend.One of the arguably most bullish on-chain metrics is the amount of Ethereum being held on exchanges, which just hit its lowest levels seen since 2018.This metric hitting a multi-year low shows that the selling pressure that the cryptocurrency can face is limited for the time being.
Ethereum consolidates below 2020 highs, but outlook remains bright 
At the time of writing, Ethereum is trading up over 3 percent at its current price of $473. This is around the price at which it has been trading throughout the past few days.It is still below its 2020 highs of just under $500 that were set a few months back during the peak phase of the DeFi mania.However, Ethereum is up significantly from lows of roughly $310 that were set after the mania subsided and the broader market turned lower.Its price action has been surprisingly tempered as of late, despite the imminent release of the 2.0 network upgrade widely viewed as a bullish catalyst.
Balance of ETH on exchanges reels to multi-year low 
One on-chain metric working in bulls’ favor is that the amount of Ethereum on exchanges hasn’t been this low since 2018.Analytics firm Santiment spoke about this in a recent post, explaining that only 13.35 percent of the total ETH supply is being held on exchanges.

“The percentage of total ETH being held on exchanges today (13.35%) has not been this low since November 23, 2018. The almost exact two-year milestone is a positive sign for #Ethereum holders, who have historically benefited when supply held off of exchanges is kept low. It indicates that large whale selloff probabilities will remain limited…”


Data Source: Santiment
Couple this trend with the tailwinds that Bitcoin is providing for the market while also considering the resurgence in DeFi’s popularity, and it seems as though serious upside could be on the horizon for Ethereum.ETHUSD Pricing Data from TradingView.


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