With only 8.7% of ETH now held on centralized exchanges, analysts warn of a growing supply squeeze as staking, custody, and on-chain activity lock up more tokens.
Fresh data shows that Ether’s available supply on centralized exchanges has fallen to its lowest level since 2015, setting the stage for what analysts describe as the tightest market conditions in the asset’s history. With more ETH flowing into staking, restaking, and long-term custody, pressure is mounting on the circulating supply that is actually available to trade.
ETH Supply on Exchanges Hits Historic Lows
Centralized exchange balances for Ether dropped to 8.7% of total supply late last week, according to on-chain data. Even as of Sunday, that figure remained exceptionally low at 8.8%, reinforcing a months-long trend of declining exchange liquidity.
Analysts note that ETH balances on exchanges have fallen by 43% since early July, coinciding with a surge in activity from digital asset treasury buyers accumulating medium- and long-term holdings.
Research groups observing the trend say ETH is entering its tightest supply environment on record, a stark contrast to Bitcoin, which still has 14.7% of supply sitting on exchanges.
Much of the withdrawn ETH is now being directed into staking, restaking protocols, Layer-2 networks, collateral cycles, and cold custody — all destinations that reduce the asset’s immediate sell-side availability.
Such a divergence is often interpreted as hidden buying strength, with OBV historically acting as one of the market’s more reliable leading indicators.
When combined with tightening supply, analysts argue that buyers may be positioning early, with price typically catching up once the market reacts to the liquidity imbalance.
Despite broader market hesitation, ETH has held above $3,000 for five consecutive days, though resistance near $3,200 continues to cap upside attempts. The ETH/BTC ratio also broke above a long-standing downtrend, drawing increased attention from traders looking for signs of rotational momentum.
With supply shrinking, technical indicators strengthening, and demand flowing into long-term holding structures, analysts say Ether may be approaching a critical inflection point as the market enters the next phase of its cycle.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.