TL;DR

Exchange balances fall from 27M ETH peak to negative, showing historic withdrawals and tightened liquid supply. Ethereum trades at $4,390, down 3% weekly, but outflows suggest long-term accumulation by holders. ETFs add demand alongside exchange withdrawals, with analysts projecting ETH could target $10,000 next cycle.

Exchange Balances Turn Negative

Ethereum’s exchange flux balance has slipped into negative territory for the first time on record, according to analyst Cas Abbé. The data shows that outflows from exchanges now exceed inflows, marking a shift in how ETH is being held. Abbé said,

“This isn’t noise, it’s billions in ETH being pulled off exchanges.”

Meanwhile, the move reflects shrinking liquid supply, as tokens are transferred into self-custody or cold storage. Abbé added,

“ETH isn’t being positioned to sell, it’s being positioned to hold.”

Balances on exchanges have been falling since late 2020. Even during sharp swings in price, the overall trend has pointed lower. The decline has accelerated over the last two years, dropping from more than 27 million ETH at peak to below zero this month.

$ETH Exchange Balance Just Went Negative

For the first time on record, Ethereum Exchange Flux Balance shows net outflows across all exchanges.

This isn’t noise, it’s billions in ETH being pulled off exchanges. In simple terms, liquid supply is shrinking while price is… pic.twitter.com/6LlFWSOSZ7

Abbé noted that previous market cycles show tops forming only after this trend reverses. Current conditions, by contrast, suggest accumulation. The steady outflow signals that holders are choosing to lock up assets rather than trade them.

Ethereum Price Trends

At the time of writing, Ethereum is trading at $4,390 with a 24-hour volume of $24 billion, based on CoinGecko data. The asset has remained steady on a daily scale but is down by 3% over the past week. While momentum has cooled in the short term, exchange withdrawals point to reduced selling pressure.

Trader Merlijn described Ethereum’s pattern as one that repeats across cycles.

“First, the shakeout. Then, the disbelief rally. Finally, the vertical blow-off,” he wrote.

His chart places ETH in the disbelief rally, projecting a move above $10,000 if the cycle continues.

ETF Growth Adds Demand

Ethereum exchange-traded funds have also played a role in recent activity. Milk Road highlighted the strong inflows since July, saying,

“The $ETH ETFs took their time getting started… but once momentum hit, they never looked back.”

ETF participation, combined with shrinking exchange supply, has added to the demand side of the market. With more ETH moving off exchanges and institutional products growing, conditions point to a tightening supply environment.