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Ethereum Exchange Supply Just Crashed To New Lows, Why This Is Bullish For Price

By: Scott Matherson

19 December 2025 at 17:00

CryptoQuant has released a new report, highlighting a significant shift in Ethereum’s exchange supply dynamics and institutional behavior. According to the data, the amount of ETH held on crypto exchanges has crashed to unexpected lows. The decline coincides with growing institutional accumulation, a trend often viewed as an early signal of a bullish price outlook.

Ethereum Exchange Balances Fall To 2016 Lows

Arab Chain, a crypto analyst on CryptoQuant, revealed that Ethereum’s exchange supply ratio across all tracked platforms has declined to approximately 0.137. According to the data referenced in the report, this represents one of the lowest readings observed since 2016.

The analyst emphasized that this metric reflects the proportion of total ETH supply currently held on exchanges relative to the overall circulating supply. Lower levels of this metric reflect a smaller fraction of ETH ready for liquidation on exchanges, which the analyst identifies as an important factor in understanding market liquidity conditions.

Arab Chain also noted that the sustained decline in this ratio indicates a continued outflow of ETH from centralized exchanges to external wallets. This movement suggests that a smaller portion of Ethereum’s supply is readily available for trading. It also signals growing confidence among holders who prefer long-term positioning over short-term speculation.

From a broader market perspective, a shrinking exchange supply is often seen as bullish for prices due to basic supply-and-demand dynamics. When fewer coins are available to sell, even a slight increase in demand can push prices up, as buyers compete for a smaller pool of liquid ETH. Reduced liquidity can also limit the intensity of declines, as large sell orders become harder to execute without moving the market.

In his report, Arab Chain references historical behaviour, illustrated by a chart showing the Ethereum supply ratio for all exchanges. The analyst noted that similar declines in exchange supply have occurred during periods of reaccumulation or in the lead-up to stable price movements following significant market volatility.

Ethereum Supply On Binance Crashes

Arab Chain has also shared insights on Ethereum’s supply on Binance. The analyst disclosed that ETH balances on the exchange have been steadily declining over the past few months. As one of the largest crypto exchanges in the world, Binance’s reserve changes often reflect broader market sentiment.

The CryptoQuant report highlights that the Exchange Supply Ratio on Binance has crashed to 0.0325, a relatively low level compared to previous months. This indicates a steady withdrawal of ETH from the crypto exchange, reducing the amount of tokens available for immediate spot market selling.

Arab Chain suggested that the drop in Ethereum supply on Binance shows that traders are becoming more cautious. Rather than engaging in short-term trades, many appear to be holding ETH off exchanges due to ongoing market volatility and uncertainty. The analyst added that the falling supply, combined with ETH’s price stability, indicates lower selling pressure. It also signals that the market may be entering a new phase of liquidity absorption and repositioning.

Less Ethereum To Sell: ETH Supply On Exchanges Slides To New Multi-Year Low

Bitcoinist

By: Godspower Owie

18 December 2025 at 10:00

In the midst of the waning action of the Ethereum price, investor sentiment, especially those on centralized exchanges, appears to be holding remarkably strong. Despite experiencing a pullback, causing ETH to lose the $3,000 price mark, the overall supply of the altcoin on cryptocurrency exchanges has fallen sharply, reaching a new multi-year low.

Exchange-Held Ethereum Hits New Low

Ethereum is becoming less prevalent on centralized exchanges at a rate that is difficult to ignore, indicating a significant change in the way investors are placing themselves. A CryptoQuant report from Arab Chain, a market expert and author, reveals that ETH exchange supply is steadily declining, reaching one of the lowest levels in years.

Specifically, the metric has dropped to its lowest levels since 2016, indicating a shift towards long-term holding and less selling pressure. As more ETH shifts from trading platforms to long-term storage or self-custody, the amount of available sell-side liquidity keeps getting tighter.

Arab Chain highlighted that the current state of ETH reflects a significant change in supply behavior across crypto exchanges, as indicated by the Exchange Supply Ratio across all platforms. The metric shows that the percentage of ETH held in exchanges has been steadily declining, which is important to comprehend the present supply and demand equilibrium.

According to the chart reading, the Exchange Supply Ratio is currently at the 0.137 level, marking one of the lowest points since 2016. This decline points to a rise in ETH outflow from exchanges to external wallets, which suggests demand for immediate selling has decreased.

Historically, such behavior signaling a growing preference for long-term holdings often emerges during periods of reaccumulation. It also manifests in the lead-up to more stable price movements following periods of volatility.

ETH Withdrawal Highly Evidenced On The Binance Platform

On Binance, the world’s largest cryptocurrency exchange, the Exchange Supply Ratio has dropped to around 0.0325, a relatively low level in comparison to previous months. What this implies is that there is a noticeable ETH withdrawal from Binance‘s wallets, which is the biggest exchange in terms of liquidity.

As a result, the supply of ETH available on the platform for immediate sale in the spot market decreases. Arab Chain noted that this dynamic reflects growing trader caution and a decline in short-term selling pressure. An interesting aspect of this trend is that withdrawals are rising even while ETH’s price is facing heightened volatility.

During the time of the research, Ethereum was trading near $2,960, a mid-range level that reflects a relative balance between supply and demand. The decreasing supply on exchanges, coupled with price stability, indicates that there is not much selling pressure on the market. Rather, it is going through a process of repositioning and absorbing liquidity.