Following its recent all-time high of $4,956 on August 23, Ethereum (ETH) has been trading within a tight range of $4,200 to $4,500 on Binance, leading to uncertainty about its next movement. However, recent exchange data indicates a potential supply crunch for ETH.
Key Points
- Ethereum's Exchange Supply Ratio (ESR) on Binance dropped sharply from 0.041 to 0.037.
- During the same period, ETH's price remained stable, trading around $4,400.
- The decline in supply ratio indicates accelerated withdrawals from exchanges, reflecting growing confidence among holders.
- The Ethereum network has seen 36 million ETH staked, with daily transactions hitting a 12-month high.
In-Depth Analysis
According to CryptoQuant's analysis, the significant decline in Ethereum's supply ratio, alongside stable prices, suggests that more investors are opting to withdraw assets from exchanges in favor of self-custody. Analyst Arab Chain notes that such trends typically indicate reduced market liquidity, which can limit selling pressure and potentially lead to price increases.Moreover, the ESR has fallen back to levels seen before June, signaling that the market has effectively “flushed out” previous profit-taking behaviors and is now in a phase of reaccumulating assets into long-term wallets. This process often builds momentum for future bull markets.