- Exchange reserves plunged from 28M ETH in 2022 to 17.8M ETH in 2025, driving a supply squeeze alongside rising prices.
- Mid-tier whale wallets cut over 430K ETH worth $1.8B in two weeks, showing high distribution with market strength.
- Ethereum held firm between $4,200–$4,600 despite whale selling, indicating strong demand absorbing reduced holder balances.
Ethereum’s supply on centralized exchanges has undergone a sharp decline since September 2022, shaping the cryptocurrency’s recent market structure. Exchange reserves stood at nearly 28 million ETH in September 2022 but have since dropped to 17.8 million ETH by September 2025.
This sustained reduction, described by one analyst on X as “falling off a cliff,” coincided with notable price strength. Ethereum’s rebound from below $2,000 to around $4,400 shows the impact of supply tightening.
Declining Exchange Reserves and Ethereum Price
Between early 2023 and mid 2024, Ethereum surged toward highs above $4,000–$4,800 as reserves continued trending downward. However, temporary corrections aligned with short phases of sideways reserve movement, suggesting periods of slowed withdrawals.
By 2025, the sharper decline in reserves corresponded with Ethereum’s recovery from bear market lows. Reduced exchange supply suggests coins are moving toward staking platforms, long term storage, or decentralized finance applications. With fewer coins available on exchanges, price trends have consistently moved upward.
Whale Activity Adds a Complex Layer
While overall reserves fell, market data from late July to late August revealed different movements among large holders. According to analyst Ali, wallets holding 1,000–10,000 ETH reduced their balances by more than 430,000 ETH, valued around $1.80 billion.
At the start of this period, these wallets held approximately 13.36 million ETH, with prices near $4,000–$4,200. Over the following weeks, balances declined steadily while Ethereum prices were between $3,800 and $4,800. Between August 8–13, balances dropped as prices climbed, pointing to profit taking activity by these mid tier holders.
Price Holds Firm Despite Distribution
From August 14 onward, 1,000–10,000 ETH balances fell below 13.00 million ETH by August 27, the lowest point in the timeframe. Despite this reduction, Ethereum prices held resilient, trading between $4,200 and $4,600 with higher lows.
This divergence shows large holders distributed supply while market demand absorbed the selling pressure. The decline in exchange reserves shows broader accumulation trends, even as whales reduced exposure.
These factors show how Ethereum market outlook is balancing falling reserves with continued distribution from mid tier holders.
