Ethereum's Price Stuck at $4K Despite Institutional Buy-In

Ethereum’s exchange supply has reached its lowest level in nearly a decade, signaling a shift toward long-term accumulation and institutional dominance. As of September 2025, the amount of Ethereum stored on centralized exchanges has dropped to 16.3 million ETH, a 45% decline from its 2023 peak of nearly 28 milliontitle1^[1]. This reduction aligns with growing institutional interest, as corporate treasuries and spot ETFs have collectively acquired approximately 10% of the total Ethereum supply, or 5.6% via ETFs and 4.3% through entities like BitMine and other institutional buyerstitle2^[2]. The withdrawal trend accelerated mid-2025, with over 2.7 million ETH ($11.3 billion at current prices) leaving exchanges in the past month alonetitle3^[3].

The decline in exchange liquidity reflects a broader reallocation of Ethereum holdings. Over 68 entities have acquired 5.26 million ETH since April 2025, with most tokens staked for yield rather than held on exchangestitle1^[1]. This shift reduces immediate selling pressure and tightens market liquidity. Data from CryptoQuant shows the 30-day moving average of Ethereum exchange net flows has reached levels not seen since late 2022, with large withdrawals often indicating a move toward self-custody or DeFi deploymentstitle3^[3]. Glassnode reports a single-day net outflow of 2.18 million ETH, the fifth-largest in the past decade, underscoring the scale of this trendtitle2^[2].

Institutional activity has been a key driver. BitMine, led by Tom Lee, now holds 2.4 million ETH (2% of total supply), while BlackRock’s ETHA ETF remains the largest with $15.93 billion in assetstitle1^[1]. However, ETFs have seen mixed results, with BlackRock experiencing a $26.47 million outflow and Fidelity’s FETH recording the largest single-day outflow of $33.26 million on September 24title1^[1]. These movements suggest evolving investor sentiment amid broader market volatility.

Despite bullish accumulation, Ethereum’s price remains range-bound around $4,000, constrained by conflicting market forces. While institutional buying has tightened supply, long-term holder (LTH) selling metrics, tracked by Glassnode, indicate ongoing pressure. The Liveliness metric, which measures LTH activity, has risen, suggesting these holders are divesting rather than accumulatingtitle2^[2]. This duality has kept Ethereum’s price within a $4,000–$4,500 range, with critical support at $4,074 and resistance at $4,222title2^[2]. Analyst Rachael Lucas described the situation as Ethereum receiving a “Wall Street glow-up,” noting that institutional accumulation and price movements are not always alignedtitle3^[3].

The implications of reduced exchange liquidity are significant. With less ETH available for trading, short-term price volatility may diminish, and large-scale transactions could face higher friction. Institutional dominance also reshapes market dynamics, as these entities prioritize staking and long-term holdings over speculative trading. If demand continues to outpace supply, upward price pressure could intensify, though regulatory and macroeconomic factors remain critical variables. Tom Lee’s forecast of $10K–$15K by year-endtitle1^[1] hinges on sustained institutional buying and reduced LTH selling.