The amount of Ethereum available on exchanges has decreased
The amount of Ethereum available on exchanges has decreased to its lowest point since November 2015 (8.97 million ETH)
The price of ETH has declined by 26-47% in the last month, with current trading around $1,970-$1,990
Decreased supply on exchanges generally indicates accumulation by long-term investors and a possible “supply shock”
Ethereum is encountering obstacles including reduced mainnet activity, diminished fee revenues, and competition from Layer-2 solutions
Spot Ethereum ETFs have recorded 12 consecutive days of outflows totaling $370.6 million
Ethereum’s availability on cryptocurrency exchanges has decreased to its lowest level since November 2015, now at only 8.97 million ETH on trading platforms. This marks a 16.4% reduction in just the last seven weeks.
The drastic drop implies that ETH holders are transferring their assets to cold storage wallets for extended holding. Numerous cryptocurrency analysts interpret this as a bullish sign of increasing confidence in Ethereum’s future price growth.
The crypto analytics platform Santiment disclosed this information on March 20. They observed that ETH has been swiftly exiting exchanges since late January.
👋 Thanks to various DeFi and staking alternatives, Ethereum’s holders have now reduced the available supply on exchanges to 8.97M, the lowest quantity in nearly a decade (November, 2015). There is 16.4% less $ETH on exchanges compared to just 7 weeks ago. 😮 pic.twitter.com/r5957wPhLi
— Santiment (@santimentfeed) March 20, 2025
This trend often foreshadows what traders refer to as a “supply shock.” When fewer tokens are accessible for immediate trading on exchanges, even slight increases in demand can cause prices to ascend.
Similar trends have been observed with Bitcoin in previous instances. In January, Bitcoin’s exchange reserves hit a seven-year low right before BTC surged to new all-time highs.
Despite these favorable supply dynamics, Ethereum’s price behavior has been sluggish. The token is currently valued at approximately $1,990, experiencing a decline of 26-47% from its recent highs.
ETH reached approximately $4,000 multiple times during the late 2024 and early 2025 bull market. Unlike Bitcoin and several other cryptocurrencies, Ethereum was unable to establish a new all-time peak above its previous record of $4,878 from November 2021.
The token faced a significant drop, reaching a low of $1,750 just last week. This reflects a 55% decrease from its local maximum during this market cycle.
Ethereum’s Contradictory Signals
Another commenter, Ted, suggested that with ETH supply on exchanges declining daily, “buyers will soon be competing, resulting in bidding wars.”
Exchange reserve $ETH is diminishing every day.
With limited supply, buyers will soon contend, leading to bidding wars.
It’s just a matter of timing. pic.twitter.com/uKVkknAAOC
— Ted (@TedPillows) March 19, 2025
Crypto trader Naber has made an even more daring prediction. They believe that the largest accumulation of ETH is happening now, potentially leading to a price range of $8,000-$10,000 in the future.
Not all indicators portray positivity, however. Ethereum’s performance relative to Bitcoin has reached its weakest point in five years, according to trader Daan Crypto Trades.
Ethereum spot ETFs have experienced 12 consecutive days of outflows, totaling $370.6 million, based on Farside data.
Another worry is the decline in activity on Eth’s mainnet. Monthly decentralized exchange (DEX) volume on Ethereum has decreased from $92 billion in December to $82 billion in February.
Layer-2 solutions like Arbitrum and Base are gaining popularity due to their reduced fees. These networks processed $5.67 billion of the total $9.8 billion in Ethereum-based DEX protocols in the previous week.
This transition has negatively impacted Eth’s fee revenue, which plummeted from $218 million in December to just $46 million in February. The recent Dencun upgrade diminished gas fees by 95%, making transactions less expensive but further affecting revenues.
From a technical standpoint, Eth encounters resistance at $2,042, with the 50-day moving average serving as a barrier. If ETH surpasses this threshold, the subsequent targets will be $2,163 and $2,370.
If it fails to maintain $1,986, ETH could drop toward $1,714, where previous purchasing interest was noted. The RSI indicator at 41.22 indicates ETH is rebounding from oversold conditions but lacks robust momentum.
Analysts at Standard Chartered have recently reduced their year-end ETH price target from $10,000 to $4,000. They attributed this adjustment to intensified competition from other networks, particularly Ethereum layer-2 solutions.
A possible trigger for Eth could arise from staking exchange-traded funds. Both the New York Stock Exchange and the Chicago Board Options Exchange have submitted applications to the SEC seeking approval for staking options in Ethereum ETFs.
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