Ethereum Supply Shrinks 1% as Whales Accumulate 1 Million ETH

Ethereum’s supply is experiencing a significant contraction as whale wallets have accumulated over 1 million ETH in a single day, marking the largest daily buy since 2018. This substantial accumulation signals renewed institutional confidence in the cryptocurrency market. The Ethereum Foundation has also contributed to this supply reduction by transferring 9,000 ETH to a single address, further constraining the circulating supply and intensifying bullish market dynamics.

According to data, a record-high net short position on ETH has been observed, setting the stage for a potential short squeeze as whale accumulation continues to grow. This divergence between bullish on-chain activity and heavy short interest creates a precarious market environment, where a sustained price rally could trigger a significant short squeeze, amplifying upward momentum.

Ethereum’s decentralized finance (DeFi) ecosystem is also experiencing a resurgence, with the total value locked (TVL) surpassing $120 billion. This recovery indicates renewed confidence among users and capital allocators in Ethereum-based protocols. Additionally, stablecoin supplies on the network are trending upward, suggesting that idle capital is re-entering the ecosystem. The combination of increased DeFi activity and rising stablecoin liquidity supports a robust foundation for sustained buying pressure, which, coupled with the shrinking ETH supply, creates a favorable environment for price appreciation.

In conclusion, the recent historic accumulation of Ethereum by whale wallets, combined with strategic fund transfers by the Ethereum Foundation and a revival in DeFi activity, has significantly tightened ETH supply. Despite record-high institutional short positions, the prevailing on-chain strength and reduced market float position Ethereum for a potential bullish breakout. Investors should monitor these supply-demand dynamics closely, as they may herald a critical turning point in Ethereum’s market trajectory.