Ethereum News Today: ETH's Supply Thinning as Buyers Outpace Sellers

Ethereum is currently experiencing a significant shift in market dynamics, with growing demand and shrinking liquidity contributing to a potential supply squeeze. Ether (ETH) recently surpassed its previous all-time high of $4,867, reaching $4,946, marking a new milestone in the cryptocurrency's price trajectory. This surge is attributed to weakening momentum in Bitcoin (BTC), while Ethereum's demand has continued to rise, supported by a reduction in exchange-held reserves.

Analysts have noted that the breakout from previous price levels indicates a period of price discovery, where the market is setting new benchmarks without prior resistance to guide it. This pattern is reinforced by the observation that buyers have absorbed supply near historical ceilings and driven prices to new highs, showcasing a classic breakout formation. Miles Deutsher, a crypto analyst, described this trend by stating, “BTC is exhausted, ETH isn’t,” highlighting a shift in relative strength and market leadership.

The shrinking supply on exchanges, particularly the declining balance of ETH in wallets controlled by centralized trading platforms, has further fueled speculation about a potential "supply shock." This phenomenon arises when demand outpaces available liquid supply, forcing buyers to bid higher to acquire ETH from off-exchange sources. Analysts like Crypto Rover emphasize that while this dynamic does not guarantee a continuous price rise, it creates an environment where scarcity can amplify price movements once momentum begins.

Despite the bullish signs, some traders have cautioned that the recent price surge could face a short-term correction. For instance, Michaël van de Poppe pointed out the unusually large weekly price candle and noted that weekend breakouts often retrace when liquidity returns to normal levels at the start of the week. This is due to thinner order books during weekends, which can lead to exaggerated price moves that are then retested as trading activity picks up.

Ethereum's growing appeal is also reflected in the futures market, where trading volumes and open interest have increased significantly. According to CryptoQuant analyst Maartunn, Ethereum Futures Trading Volume reached $162.6 billion, surpassing Bitcoin’s share in the futures market. This shift indicates a capital rotation toward Ethereum, with some large investors moving positions away from Bitcoin to ETH. Additionally, Ethereum's funding rates have surged to a seven-month high, signaling stronger long-term demand from traders.

The broader market dynamics are further supported by Ethereum's strong spot demand, as indicated by a positive buy-sell delta of $5.6k and a negative exchange netflow of 26.6k ETH. These metrics suggest that more buyers than sellers are active in the market, contributing to upward price pressure. The combination of strong futures and spot demand positions Ethereum for potential further gains, especially if the current momentum is sustained.

Institutional interest in Ethereum has also grown, with several major asset managers and companies increasing their exposure to ETH. For example, SharpLink Gaming invested over $1.3 billion in Ethereum, and Bit Digital is expanding its share capital to enhance its Ethereum strategy. These developments underscore Ethereum's increasing role in the institutional investment landscape, particularly as a foundational asset in decentralized finance (DeFi) and blockchain applications.

Source:

[1] As ETH Breaks Above USD4,900, Analyst Sums Up Crypto Market: BTC Is Exhausted, ETH Isn’t (https://www.coindesk.com/markets/2025/08/24/as-eth-breaks-above-usd4-900-analyst-sums-up-crypto-market-btc-is-exhausted-eth-isn-t)

[2] Ethereum Price: ETH Live Price Chart, Market Cap & News (https://www.coingecko.com/en/coins/ethereum)

[3] Ethereum Futures Lead the Charge – Bitcoin Dominance Takes a Hit (https://ambcrypto.com/ethereum-futures-lead-the-charge-bitcoin-dominance-takes-a-hit/)

[4] Ethereum vs. Bitcoin: The Flippening, Historical Context and 2025 Outlook (https://www.mitrade.com/insights/news/live-news/article-3-1064277-20250824)

[5] Ethereum Staking Explained: How to Earn Passive Income (https://komodoplatform.com/en/academy/ethereum-staking-explained/)