Ethereum Supply on Exchanges Drops 16.4% in 7 Weeks

Ethereum’s supply on exchanges has reached its lowest level since November 2015, with only 8.97 million ETH currently available on trading platforms. This significant drop, which represents a 16.4% decrease over the past seven weeks, indicates that holders are transferring their assets to cold storage wallets for long-term holding. This trend is often seen as a bullish signal, suggesting growing confidence in Ethereum’s future price appreciation.

According to crypto analytics platform, the rapid decline in ETH supply on exchanges began at the end of January. This pattern is reminiscent of what traders refer to as a “supply shock,” where a decrease in available tokens for immediate trading can lead to price increases even with modest demand. Similar dynamics were observed with Bitcoin earlier this year, where a seven-year low in exchange reserves preceded a surge to new all-time highs.

Despite these positive supply dynamics, Ethereum’s price performance has been underwhelming. The token is currently trading around $1,970-$1,990, marking a 26-47% decline from its recent peaks. Ethereum reached around $4,000 on multiple occasions during the late 2024 and early 2025 bull run but failed to set a new all-time high above its previous record of $4,878 from November 2021. The token experienced a steep decline, bottoming at $1,750 just last week, representing a 55% drop from its local peak during this market cycle.

Several crypto traders remain optimistic about Ethereum’s future. One trader suggested that with the daily decrease in ETH supply on exchanges, buyers will soon compete, leading to bidding wars. Another trader made a bolder prediction, believing that the largest ETH accumulation is currently taking place, potentially leading to an $8,000-$10,000 price range in the future. However, not all indicators are positive. Ethereum’s performance against Bitcoin has been at its lowest point in five years, and spot Ethereum ETFs have experienced 12 straight days of outflows totaling $370.6 million.

Ethereum faces several challenges, including decreased mainnet activity and lower fee revenue. Monthly decentralized exchange (DEX) volume on Ethereum has fallen from $92 billion in December to $82 billion in February. Layer-2 networks like Arbitrum and Base are gaining traction due to their lower fees, processing $5.67 billion of the past week’s $9.8 billion in Ethereum-based DEX protocols. This shift has hurt Ethereum’s fee revenue, which dropped from $218 million in December to just $46 million in February. The recent Dencun upgrade reduced gas fees by 95%, making transactions less costly but further impacting revenue.

From a technical perspective, Ethereum faces resistance at $2,042, with the 50-day moving average acting as a barrier. If ETH breaks above this level, the next targets would be $2,163 and $2,370. On the downside, a failure to hold $1,986 could see ETH decline toward $1,714, where previous buying interest emerged. The RSI indicator at 41.22 shows ETH recovering from oversold conditions but lacking strong momentum.

Standard Chartered analysts recently lowered their year-end ETH price target from $10,000 to $4,000, citing increased competition from other networks, especially Ethereum layer-2s, as a main factor for this revision. A potential catalyst for Ethereum could come from staking exchange-traded funds. Both the New York Stock Exchange and Chicago Board Options Exchange have submitted requests to the SEC to permit staking in Ethereum ETFs.