Ether price exchange balances fall to lowest level since Ethereum launch

On-chain data shows that the proportion of Ether held on centralized exchanges dropped to 8.7% on Thursday last week and remained close to that level at 8.8% on Sunday. Analysts describe it as Ethereum’s tightest supply environment to date, with exchange reserves having declined by about 43% since the beginning of July, around the time when digital asset treasuries began ramping up ETH purchases.

One macro research feed, Milk Road, called the current structure “a level we’ve never seen before,” noting that ETH is increasingly being pulled into destinations that rarely sell, including staking contracts, restaking schemes, layer-2 networks, digital asset treasuries, collateral loops and long-term self-custody. The same commentary stressed that while sentiment feels heavy, supply dynamics are changing in the background and could eventually force the market to adjust.

By comparison, roughly 14.7% of Bitcoin’s circulating supply still sits on exchanges, according to the same Glassnode dataset, underscoring how much more tightly held ETH has become on centralized trading venues. Other analyses tracking absolute balances estimate that exchange-held Ether has fallen from peaks above 30 million ETH in 2020 to around 14.8 million ETH this year, roughly half the earlier level and the lowest reading since 2016.

Technical indicators are also drawing attention. Analyst Sykodelic reported that Ether’s On-Balance Volume (OBV), a volume-based momentum gauge, broke above resistance late last week even as price was rejected at higher levels. They described the pattern as a classic divergence that indicates hidden buying strength, adding that OBV is one of the more reliable leading indicators for future upside, while cautioning that no signal is guaranteed.

In price terms, Ether has held above $3,000 for most of the past five days, consolidating around the $3,050 area after several failed attempts to clear resistance at $3,200. At the same time, the ETH/BTC pair recently broke above a longer-term downtrend line, catching the attention of traders watching for a potential period of relative strength versus Bitcoin.

Market observers link the shrinking exchange balances to several structural shifts in Ethereum’s ecosystem. Since the rollout of proof-of-stake withdrawals and the rise of liquid staking and restaking protocols, a growing share of ETH has been committed to earning yield or securing the network instead of sitting idle on exchanges. Additional flows into institutional treasuries and layer-2 applications further reduce the amount of Ether readily available for sale on centralized venues.

While some analysts see the current configuration as the early stages of a potential supply squeeze, they also point out that broader crypto sentiment remains cautious after recent market pullbacks and uneven inflows into Ether-focused exchange-traded products. For now, the data shows a clear divergence: exchange liquid supply is tightening to decade lows, even as prices continue to trade in a relatively narrow band just above $3,000 and traders wait to see whether demand will be strong enough to test resistance levels again.