Ethereum has slipped below the $3,000 level again as selling pressure returns across the broader crypto market, keeping bulls on the defensive after a brief recovery attempt. The move back under this psychological zone suggests that traders remain cautious, with downside volatility re-emerging as risk appetite fades and liquidity thins near key support levels.

However, while price action looks heavy in the short term, on-chain data is flashing a different signal beneath the surface. According to Arab Chain, Ethereum reserves held across centralized exchanges have dropped to around 16.2 million ETH, marking their lowest level since 2016. That milestone matters because it highlights a steady, long-duration trend of withdrawals rather than a sudden one-off event.

In practical terms, fewer coins sitting on exchanges typically means less immediate supply available for spot selling, especially during periods of market stress. This behavior can reflect a shift away from short-term trading and toward longer-term holding, self-custody, or deployment in DeFi.

Ethereum remains vulnerable as price struggles below $3,000. Still, the persistent reserve decline suggests that supply conditions may be tightening in the background, setting the stage for a sharper reaction if demand returns.

Binance Reserves Keep Falling

The CryptoQuant analysis also points to a similar reserve drawdown on Binance, reinforcing the broader exchange supply contraction narrative. Since the beginning of 2026, Binance’s Ethereum reserves have dropped from roughly 4.168 million ETH to around 4.0 million ETH, signaling steady withdrawals even as the price remains under pressure. This matters because Binance is often the main liquidity hub for ETH spot and derivatives, so shifts in its reserve balance can reflect real changes in market positioning.

What stands out is that this decline is happening without a meaningful rebound in inflows. In other words, ETH is not rotating back onto exchanges aggressively, suggesting sellers are not rushing to increase liquid supply at current levels. That dynamic typically aligns with a market where investors prefer holding behavior over active distribution. Either moving ETH to cold storage or deploying it across DeFi.

While reserves falling does not guarantee an immediate rally, it can change the supply-demand equation over time. With fewer coins sitting on exchanges, the market becomes more reactive if demand returns suddenly, as there is less readily available ETH to absorb buy pressure.

If Ethereum manages to reclaim key resistance levels, this supply tightening could amplify upside follow-through.

Ethereum Loses $3,000 as Bears Regain Control

Ethereum is showing renewed weakness after failing to hold above the key $3,000 level, with price now hovering near $2,970 on the daily chart. After briefly stabilizing earlier this month, ETH attempted a rebound toward the $3,300–$3,400 supply zone. But momentum faded quickly as sellers stepped back in and pushed the market lower.

From a technical perspective, Ethereum remains trapped below its major moving averages, reinforcing the bearish structure. The recent rejection near the descending trend of the 200-day average signals that upside attempts are still being capped by overhead resistance. Keeping bulls on the defensive. At the same time, the breakdown below $3,000 shifts market sentiment back into risk-off mode. Especially as crypto traders remain sensitive to broader macro uncertainty.

The current price action also reflects a fragile recovery attempt rather than a confirmed reversal. ETH’s latest drop places focus on the $2,850–$2,900 region as the next support area. An area where buyers previously stepped in during earlier selloffs. If this zone fails to hold, the market could revisit deeper levels from the previous correction phase.

For bulls to regain control, Ethereum must reclaim $3,000 quickly and build stronger demand above that threshold.

Ethereum is struggling to push above critical supply levels after a brief surge above $3,300, as the market attempts to stabilize following weeks of sustained selling pressure. While the rebound has sparked renewed optimism, price action remains fragile, with bulls still needing clear confirmation before a broader recovery can take hold. Still, the fact that ETH is holding near key levels has led some analysts to start calling for higher prices, arguing that the market may be entering a new phase after the recent downtrend.

Supporting this view, a CryptoQuant analyst highlighted Ethereum Exchange Netflow spot data showing persistent ETH outflows from spot exchanges during price pullbacks, while inflows during upward moves remain relatively limited. This pattern suggests a more disciplined supply environment, where holders are reluctant to sell into weakness and are not aggressively distributing during rallies.

In other words, sell-side pressure appears to be easing, even as Ethereum remains capped below major resistance. If demand returns, this type of netflow structure can support sharper upside moves, as fewer coins are available on exchanges to meet new buying interest. For now, Ethereum is caught between fading fear and unfinished recovery, with the next breakout attempt likely to define the short-term trend.

ETH Supply Tightens As Exchange Outflows Persist

Ethereum’s recent Exchange Netflow behavior suggests that the latest pullbacks have been met with holding and accumulation rather than broad-based distribution. Instead of rushing to send ETH onto exchanges during weakness, many participants appear willing to sit through volatility, reducing the immediate sell pressure that typically accelerates downtrends. This supports the idea that supply is gradually stepping back, even as price remains capped below key resistance zones and market sentiment stays cautious.

However, Exchange Netflow alone is not enough to define direction. A favorable supply structure can still fail if demand remains weak, or if macro conditions deteriorate and force investors back into risk-off positioning. In that scenario, downside continuation cannot be ruled out, even if exchange balances remain constrained.

That said, in the absence of major systemic stress, the current netflow profile offers a constructive backdrop for upside. The lack of supply expansion during drawdowns and the restrained profit-taking during rebounds imply that sellers are not in control. If demand rotates back into Ethereum, price could respond more efficiently because there is less readily available liquidity sitting on exchanges.

In this sense, the on-chain data is not signaling an immediate breakout. Instead, it highlights a market structure that appears increasingly prepared for upward price action once broader conditions align and buyers regain conviction.

Ethereum Bulls Fight Structural Resistance

Ethereum is attempting to stabilize above the $3,300 zone after a sharp rebound from the December lows, but the chart shows bulls are still battling heavy overhead supply. Price recently pushed into the $3,300–$3,400 band, a level that has repeatedly acted as a pivot point during this downtrend. While momentum has improved, ETH is still trading below key moving averages, reinforcing the idea that this move may be more of a recovery leg than a confirmed reversal.

The blue moving average overhead continues to slope downward and sits above current price, highlighting that the broader structure remains pressured. At the same time, the green moving average is flattening near the $3,300 area, adding to the resistance cluster and making this zone difficult to reclaim cleanly.

From a market structure perspective, ETH has shifted from a clear downtrend into a tighter consolidation, with buyers stepping in on dips and building higher lows since early January. However, volume remains relatively muted compared to the October and November selloffs, suggesting that conviction is still developing.

Featured image from ChatGPT, chart from TradingView.com