Ethereum’s Exchange Supply Hits 9-Year Low, Could Trigger Price Surge
By Journalist | February 20, 2025
Ethereum’s exchange supply has plummeted to its lowest level in nine years, indicating a potential liquidity squeeze that could pave the way for a bullish trend in the medium term.
With a decrease in sell-side pressure and an uptick in accumulation, there is speculation that Ethereum (ETH) could surpass the crucial $3.5K resistance level in the near future.
Key Technical Indicators Signal Bullish Momentum
Despite trading 32% below its recent peak of $4,016, Ethereum has shown signs of positive momentum, with the Relative Strength Index (RSI) bottoming out and a bullish Moving Average Convergence Divergence (MACD) crossover on the horizon. These indicators suggest that ETH’s consolidation phase may be laying the groundwork for a breakout.
Historical data, however, urges caution as previous attempts to breach key resistance levels have faltered due to difficulties in absorbing selling pressure.
Supply Shock Looming as Exchange Reserves Plummet
In a surprising turn of events, Ethereum’s spot exchange supply has dropped to a nine-year low of 8.2 million ETH. This tightening of liquidity coupled with a potential spike in demand could lead to a supply shock that may drive ETH past significant resistance barriers.
Mapping Ethereum’s Next Major Hurdle
Ethereum is currently facing a critical resistance level at $2,785, where approximately 8.10 million addresses would become profitable, potentially unleashing $20 billion worth of sell pressure.
While spot reserves are at a nine-month low, indicating accumulation, recent data shows that over 2 million ETH have been moved to exchanges in February, raising concerns about increased selling pressure.
Weak demand from U.S. and Korean investors adds to the uncertainty surrounding Ethereum’s upside potential, posing a risk of trapping leveraged long positions in the futures market.
In the event that demand fails to pick up, Ethereum could experience a pullback towards $2,264, a concentration point for 62.38 million ETH.
As the market continues to navigate through these conflicting signals, investors are advised to stay vigilant and monitor key technical indicators for potential market movements.
Next: Bitcoin’s mixed signals – Institutional sell-offs vs. whale accumulation
This article provides a comprehensive analysis of Ethereum’s current market dynamics and highlights the potential factors that could influence its price trajectory in the coming weeks.