Ethereum News Today: Ether Bull Flag Suggests 34% Rally as Exchange Supply Hits 12%

Ether has formed a bullish flag pattern on the daily chart, a technical signal that suggests a potential price rally toward $6,100—an increase of approximately 34% from current levels [1]. This development coincides with a notable reduction in the amount of ETH available on exchanges, which has now dropped to just 12% of the total supply [1]. The decline indicates that a growing portion of Ethereum is being held outside of exchanges, often by long-term investors, suggesting a strengthening of the market’s bullish sentiment.

Ethereum’s price reached a multi-year high of $4,792 on Thursday, following a 45% increase from its August 3 low of $3,354. The price is currently consolidating below its all-time high of $4,867 after validating a classic bullish continuation pattern [1]. The rally saw ETH break through the resistance level provided by the upper boundary of a bull flag at $3,770 on the daily chart, confirming a bullish breakout. The “bull flag” is a continuation pattern that typically follows a significant price rise, followed by a consolidation phase [1].

The success rate of such a pattern is relatively modest, at around 54%, highlighting the need for caution [1]. However, some analysts remain optimistic, with trader Mister Crypto noting that "the target is $6,000" [1]. Other more ambitious projections suggest Ethereum could rise to between $12,000 and $30,000, driven by increasing institutional demand through spot Ethereum ETFs and ETH treasury companies [1].

The decline in ETH supply on exchanges is a significant on-chain signal. According to Glassnode, the percentage of ETH held on exchanges has fallen to 12.36%, the lowest since July 2016 [1]. This drop suggests a potential “supply shock,” where strong buyer demand meets a shrinking supply, which can drive prices higher. Popular trader Merlijn The Trader highlighted this in a recent post, stating that "only 18.5M Ethereum left on exchanges" and noting that "when scarcity meets demand, price doesn’t go sideways. Supply squeeze incoming." [1]

The reduced exchange supply is further supported by the fact that over 35.7 million ETH is currently staked, representing 30% of the total supply [1]. This level of staking indicates strong holder conviction and reduced sell-side pressure, reinforcing the bullish case for Ethereum.

While the technical and on-chain indicators point to a favorable environment for ETH, it is important to remember that these are projections based on current data and patterns. The market remains subject to rapid changes, and no technical pattern guarantees a specific outcome. Investors are advised to continue monitoring both price movements and on-chain metrics for further confirmation before making trading decisions [1].

[1] Cointelegraph. "Ether bull flag targets $6K as ETH supply on exchanges falls to 12%." https://cointelegraph.com/news/ether-bull-flag-targets-dollar6k-as-eth-supply-on-exchanges-falls-to-12percent