Ethereum Exchange Supply Hits Historic Low Below 4.9% — Is Price Breaking $3,000 Soon?

According to on-chain data from analytics platform Santiment, Ethereum’s supply on exchanges has dropped to an all-time low, plunging below 4.9%. This marks the lowest level recorded in its 10+ year history and highlights a dramatic shift in investor behavior. This is a prime indicator of an incoming upside for Ethereum, especially with sentiment surrounding the cryptocurrency becoming increasingly bullish.

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Ethereum On Exchanges Hits Record Low

Ethereum (ETH) is currently trading around $2,530, a significant recovery from its April lows around $1,385. Notably, ETH’s price action in the past seven days has been marked by intense volatility. After peaking at approximately $2,730, the price faced resistance and dipped below $2,600. Despite this pullback, the overall market sentiment is still optimistic.

Amidst the back and forth in Ethereum’s price action, on-chain data shows a declining trend regarding the ease of ETH tokens that can be traded on crypto exchanges. As it stands, on-chain data from Santiment shows that just 4.893% of all ETH is now held on trading platforms, a milestone never before seen in Ethereum’s 10+ year history. Interestingly, more than 15.3 million ETH have been withdrawn from exchanges over the last five years alone. 

This historic low can be partially attributed to the rise in ETH staking in the past five years, especially since the launch of the Ethereum 2.0 upgrade. The side effect of this has been a continued decline in exchange liquidity. However, this decline also limits the amount of ETH available for spot selling, thereby reducing the kind of sell pressure that typically causes sharp price drops during market corrections.

On-chain data from CryptoQuant supports this tightening supply narrative, showing that whale wallets holding between 10,000 and 100,000 ETH have accumulated over 450,000 ETH in the last month alone. These large-scale acquisitions come at a time when exchange balances are shrinking. The chart from CryptoQuant illustrates how whale balances have surged alongside a steady increase in Ethereum’s price since April 7.

Raoul Pal Predicts ETH Price Will Explode

The optimistic on-chain data has been echoed by prominent macro investor and crypto analyst Raoul Pal. In a recent interview, Pal talked on Ethereum’s explosive potential, saying, “I think ETH is going to shock people probably going forward. It’s going to explode.” His outlook is based on the entry of an altcoin season.

As it stands, all eyes are on the $2,800 resistance. Technical analysis shows that a Golden Cross has recently been confirmed on ETH’s 12-hour chart. A clean breakout from this technical formation could open the doors to $3,000 and $4,000, particularly if Bitcoin sustains its current momentum on its way to a new all-time high above $108,800.

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Featured image from Adobe Stock, chart from Tradingview.com

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