Ethereum Supply Drops 1 Million ETH as Whales Accumulate

Ethereum's available supply has significantly decreased following a historic daily accumulation of over 1 million ETH by large whale wallets. This substantial buying spree coincides with improving fundamentals and declining exchange balances, fueling expectations of a bullish reversal in the ETH market.

Whale wallets, specifically those holding between 1,000 and 10,000 ETH, rapidly increased their holdings by over 1 million ETH within a 24-hour period. This marked the largest daily net inflow into whale wallets since 2018, significantly tightening on-chain liquidity across major exchanges as their total holdings surpassed 14.3 million ETH.

The Ethereum Foundation further contributed to this trend by transferring 9,000 ETH to a Gnosis Safe wallet within a month. The destination wallet received ten separate 1,000 ETH transactions, with the latest valued at $2.45 million. Such fund movements often precede over-the-counter (OTC) activity or staking strategies, reducing the market float.

The aggressive shift in whale behavior has pulled available supply off the market at a critical technical zone. ETH's price rebounded quickly from support near $2,100 and is now testing levels above $2,500. If the price holds above $2,300, analysts anticipate a surge toward $4,000 as supply constraints deepen.

Despite the bullish on-chain activity, institutional traders on the CME remain heavily positioned against Ethereum, with a record net short position of over 11,000 contracts. These extreme bearish bets contrast with rising on-chain strength and increasing whale interest, increasing the probability of a short squeeze if ETH rallies further.

Ethereum’s decentralized finance (DeFi) ecosystem is showing signs of revival. The total value locked (TVL) on the network has risen back above $120 billion, a level last seen in late 2021. This renewed confidence in Ethereum protocols is restoring user activity and capital allocation. Stablecoin supplies on Ethereum are also trending upward, suggesting idle capital is returning to the ecosystem. This signals potential for increased buying pressure, especially when coupled with reduced ETH availability. With fewer sellers and rising demand, market dynamics now lean bullish.