Ethereum Exchange Supply Hits Record Low as ETH Gains 10% — Is a Correction Next?

Ethereum (CRYPTO: ETH) has gained around 10% over the past month and is trading above $2,600, while its supply on exchanges has fallen to a historic low.

How ETH Supply Can Change Dynamics

Santiment Intelligence data shows that only 3.49% of Ethereum’s supply now sits on tracked exchanges, marking a record low, with another 1.16% of total ETH supply moving off exchanges since June.

The supply decline comes as Ethereum has gained roughly 10% over the past month and currently trades above $2,600.

Fewer tokens sitting on exchanges mean less ETH is immediately available to be sold. While shrinking exchange balances do not guarantee higher prices, Santiment noted that they reduce the pool of readily tradable supply if demand strengthens.

Staking and DeFi are absorbing some of those coins.

Santiment estimates roughly 35% of ETH is staked, while Ethereum holds around $53 billion in DeFi value, giving investors incentives to keep their holdings deployed on chain rather than on exchanges.

Large treasury holders have also increasingly turned to staking, with Santiment pointing to BitMine Immersion Technologies (NYSE:BMNR), which reported more than 5 million ETH staked earlier this month.

Rally Faces Liquidity Test

Despite tightening supply, trader Niels expects a near-term Ethereum correction after its roughly 90% rebound from the bottom.

He sees downside liquidity around $2,600-$2,550, with another cluster below $2,400, potentially flushing leveraged longs before the next move higher.

Could ETH Sweep Lower Ahead Of Leg Higher?

CryptosBatman echoed the possibility of more downside, although his broader upside target remains intact.

The trader said Ethereum’s 1.618 Fibonacci extension remains on the table but expects ETH to first move back toward its previous resistance zone based on current price action.

A sweep of liquidity in that area could potentially create a new entry zone.

That leaves Ethereum caught between a tightening longer-term supply setup and the possibility of a shorter-term leverage flush.

Image: Shutterstock

Photo: Shutterstock