Ether (ETH), the second-largest cryptocurrency by market capitalization, has seen a constant decline in exchange supply over the past six months post-Merge. The Ethereum network underwent a major upgrade in September 2022, moving from a proof-of-work (PoW) to a proof-of-stake (PoS) network in an event called the Merge.

According to on-chain data shared by crypto analytics firm Santiment, the amount of available ETH sitting on exchanges continues to fall. Since the Merge, there is 37% less ETH on exchanges. A constant decline in supply on exchanges is considered a bullish sign, as there is less ETH available to trade or sell.

There was a total of 19.12 million ETH, worth $31.3 billion, on exchanges in September before the Merge. The number has now declined to 13.36 million ETH, worth $19.7 billion, in the second week of February.

A major chunk of the ETH supply is being moved into self-custody, while many traders also prefer staking with the Shanghai upgrade just around the corner. Shanghai, Ethereum’s upcoming update, is scheduled for March. The Shanghai hard fork will integrate more improvement proposals for network enhancements and allow stakers and validators to withdraw their holdings from the Beacon Chain.

Currently, 16 million ETH, or 14% of the total supply, is staked on the Beacon Chain, amounting to approximately $25 billion at current prices — a sizable amount that will gradually become liquid after the Shanghai hard fork.

Related: What’s in and what’s out for Ethereum’s Shanghai upgrade

Apart from a constant decline in ETH supply held on exchanges, ETH’s overall market supply has also declined since it turned deflationary post-London upgrade. The deflationary model comes from a fee-burning mechanism introduced through Ethereum Improvement Proposal (EIP)-1559.

A total of 2.9 million ETH has been burned since the London upgrade in August 2021, estimated to be worth $4.5 billion in today’s value.