- Ethereum’s exchange supply hit a 9-year low, signaling reduced selling pressure and potential for a price surge.
- Long-term holders are tightening liquidity, mirroring Bitcoin’s past trends that led to sharp price increases.
- Technical patterns and RSI suggest ETH is poised for a breakout, with strong buying interest near key support levels.
Ethereum’s exchange supply is at nine-year lows. Ethereum’s (ETH) supply in exchanges fell to 8.97 million ETH as of March 2025, according to CryptoRank. It is the lowest since November 2015. Investors are moving ETH off the exchanges and putting them into cold storage, with available liquidity reducing. This was a similar trend observed in the behavior of Bitcoin (BTC) last January when exchange reserves also hit a seven-year low ahead of a major price surge.
ETH Supply Decline and Market Impact
The supply surpassed 10.5 million ETH in April 2024. But by the middle of 2024, it had dropped below 9.5 million ETH after varying. Early in 2025, the drop persisted, falling below 9 million ETH. This reduction suggests a shift in investor sentiment toward long-term holding, which can tighten liquidity and potentially drive prices higher.
Price movements of ETH were mirroring supply movements. ETH initially traded above $3,500 in April 2024. It dropped below $3,000 around mid-2024 when supply declined. ETH hit a high at the end of 2024 around $4,000 before it reversed lower. The price fell below $3,000 at the beginning of 2025, eventually falling to $2,000 in March. The inverse relationship between supply and price was evident as diminishing exchange reserves typically indicate lower selling pressure, leaving room for bullish momentum.
Technical Outlook: Ethereum Primed for a Breakout
Despite recent price declines, the medium-term trend for Ethereum is still bullish. Merlijn The Trader indicates an uptrending channel in ETH’s price action. Ethereum touched its lower trendline of the channel since mid-2022, including reversals in early 2023 and 2025. All reversals backed high levels of bullish momentum, which indicates high buying interest.
The long-term upward trend was maintained as ETH broke above $2,600 following the most recent bounce from the lower trendline. During market dips, the Relative Strength Index (RSI) remained above 40, indicating heightened purchasing demand. The RSI recently rose toward 70, which is traditionally in line with resistance levels. This implies that Ethereum might be preparing for a new surge.
Furthermore, past patterns indicate that the price of ETH recovers significantly after testing support levels. A possible breakout is hinted at by the combination of a bullish technical setup and a decreased exchange supply. ETH might recover resistance levels and reach new highs if buying pressure persists.
