Ethereum Supply on Exchanges Hits Historic Low: Will ETH Price Respond?

Ethereum has primarily traded between $2,600 and $2,800 since the February 3 crash. This muted price action has sparked concerns among investors.

However, its brief tryst above $2,800 this week has led experts to speculate if ETH is showing signs of a turning point in its trajectory, even as it failed to retain the bullish momentum.

Accelerated Exchange Withdrawals

According to Santiment’s latest analysis, Ethereum has shown mild signs of a rebound, currently trading near $2,700 and outperforming most altcoins at the start of the week.

A key trend observed is the continued movement of ETH from exchanges to cold wallets at a “shocking pace,” with only 6.38% of its supply remaining on trading platforms – the lowest since genesis.

Additionally, community interest in Ethereum rose in February which was indicative of a renewed confidence in the asset. After underperforming compared to other large-cap cryptocurrencies in 2024, there is growing anticipation that the world’s largest altcoin may finally see a stronger recovery once broader market conditions improve.

Room for Growth

Besides setbacks in price, Ethereum’s market dominance has halved since April 2023, falling from 20.5% to 10.5%, as liquidity and attention have shifted to Solana (SOL) and, more recently, XRP.

However, experts such as Nick Forster, founder of Derive.xyz, still believe that the altcoin is due for recovery, especially with the upcoming Pectra upgrade. In a statement to CryptoPotato, Forster said,

“ETH has a solid foundation for a resurgence. The Pectra upgrade, scheduled for April 8 for example, is bringing network improvements, faster transactions, and better staking mechanics. Vitalik’s push for a 10x increase in the L1 gas limit, is citing improved application development and security. And the ETH Foundation’s recent $120 million allocation to DeFi projects, is signaling a renewed focus on adoption and institutional interest through ETH Realize.”

According to Glassnode’s latest update, US spot Ethereum ETFs have recorded net inflows of nearly 145,000 ETH so far this month. This is a significant surge, nearly seven times the total inflows observed in January. The strong inflows suggest that despite recent market uncertainties, the altcoin remains a favored asset among investors seeking exposure through regulated financial instruments.

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