Ethereum News Today: Ethereum supply squeeze and $2.85B ETF inflows drive bullish momentum

Ethereum is experiencing a compelling bullish momentum fueled by a significant supply squeeze and rising institutional interest, according to recent analyses. A growing number of experts are highlighting how the current market dynamics suggest a strong foundation for future price appreciation. The reduction in Ethereum held on exchanges has reached critical levels, signaling a shift in investor behavior that prioritizes long-term value over short-term trading [1].

Exchange-held Ethereum balances have seen a sharp decline since late July, with daily withdrawals frequently surpassing 100,000 ETH. For instance, a notable withdrawal of 92,899 ETH, valued at approximately $412 million, was recorded from Kraken over a four-day period. This indicates that investors are increasingly moving their holdings out of exchanges into more secure storage or into decentralized finance protocols, reducing immediate liquidity and downward price pressure [1].

The resulting supply squeeze has created a scenario where the circulating ETH supply on exchanges has dwindled to just 18.4 million tokens. Analysts point out that such a tightening of supply typically leads to upward price movement, particularly when demand remains stable or increases. The reduced availability of Ethereum on exchanges means fewer tokens are immediately available for sale, which can help limit volatility and enhance the perception of scarcity, thus driving up demand [1].

A key driver of the current optimism is the performance of U.S. spot Ethereum ETFs, which have recorded substantial inflows. In recent weeks, these funds have seen a total of $2.85 billion in inflows, with BlackRock’s spot ETH ETF leading the way with $2.32 billion in new investments. This surge in demand from traditional investors has provided strong validation for Ethereum as a legitimate asset class within institutional portfolios [1].

Institutional adoption is also expanding beyond ETFs. Several corporations have taken steps to include Ethereum in their treasury allocations, with companies like SharpLink Gaming and Bitmine acquiring hundreds of thousands of ETH. This trend highlights a broader shift in corporate finance strategies and reflects growing confidence in Ethereum’s long-term utility and value proposition [1].

While the long-term fundamentals of Ethereum remain strong, short-term price corrections are expected as part of a natural market cycle. These pullbacks may present new opportunities for investors who have not yet entered the market. However, the overall narrative remains consistent: the forces of supply and demand are aligning to support a continued upward trajectory for Ethereum [1].

The growing institutional Ethereum demand is not merely a temporary trend but a sign of a maturing digital asset market. Institutional investors are increasingly allocating capital to Ethereum, recognizing its role in the decentralized economy and its deflationary characteristics post-merge. This sustained demand from large-scale investors is expected to absorb available supply, reinforcing the bullish outlook [1].

Ethereum’s current trajectory is supported by a powerful feedback loop between shrinking supply and robust demand from both institutional and retail investors. These factors, combined with Ethereum’s evolving utility and strong ecosystem, position it as a cornerstone asset in the digital economy. Market volatility remains a factor, but the underlying fundamentals suggest a strong and sustainable upward trend for Ethereum in the coming months [1].

Source: [1] Ethereum Bullish Outlook: Unstoppable Momentum from Supply Squeeze (https://coinmarketcap.com/community/articles/68a276551ef5bf7de6c061c1/)