- Ethereum supply on exchanges has dropped to its lowest level since November 2015, reaching 8.97 million ETH
- ETH price has fallen 26-47% from recent highs, trading around $1,990
- Decreased exchange supply could signal a potential “supply shock” and price rally
- Layer-2 networks are attracting users away from Ethereum mainnet, reducing fee revenue
- Ethereum ETFs have experienced 12 straight days of outflows totaling $370.6 million
Ethereum’s supply on cryptocurrency exchanges has fallen to its lowest level in nearly a decade, but the price continues to struggle amid broader market challenges.
The second-largest cryptocurrency by market capitalization is currently trading around $1,990, down approximately 26% over the past month.
Data from crypto analytics platform Santiment shows that Ethereum’s available supply on exchanges has dropped to 8.97 million ETH. This marks the lowest level since November 2015, representing a 16.4% decrease since the end of January.
👋 Thanks to the many DeFi and staking options, Ethereum’s holders have now brought the available supply on exchanges down to 8.97M, the lowest amount in nearly 10 years (November, 2015). There is 16.4% less $ETH on exchanges compared to just 7 weeks ago. 😮 pic.twitter.com/r5957wPhLi
— Santiment (@santimentfeed) March 20, 2025
This reduction suggests investors are moving their ETH into cold storage wallets for long-term holding. Many are also transferring tokens to DeFi and staking platforms rather than keeping them available for immediate trading.
When supply decreases on exchanges, it typically reduces selling pressure. Fewer tokens available for trading can create conditions for a potential “supply shock” if demand remains strong or increases.
Some analysts draw parallels to Bitcoin’s recent performance. In January, Bitcoin reserves on exchanges hit a nearly seven-year low. Shortly after, BTC surged to a new all-time high above $100,000.
Crypto trader Crypto General told their 230,800 X followers that it’s “Just a question of time before the big supply shock” for Ethereum. Another commentator, Ted, suggested that with ETH supply on exchanges dropping daily, “buyers will soon compete, leading to bidding wars.”
$ETH exchange reserve keep decreasing because big whales accumulating on cold wallet for cheap.
Just a question of time before the big supply shock
$6,000 loading 🧲⚡️ pic.twitter.com/ULy41ldzvd
— Crypto General 🧲 (@DaCryptoGeneral) March 19, 2025
Despite these bullish signals, Ethereum has faced challenges in recent months. Unlike Bitcoin and some other cryptocurrencies, ETH failed to establish a new all-time high during the recent market rally.
Ethereum reached around $4,000 on several occasions but was rejected before it could approach its November 2021 peak of $4,878. The price has since fallen by roughly 50% from those local highs.
The cryptocurrency’s dominance in the market has also shrunk. Ethereum’s market share has decreased from over 22% in early 2024 to under 9% currently.
One factor affecting Ethereum’s performance is increased competition from layer-2 networks. These scaling solutions process transactions more cheaply than the Ethereum mainnet.
According to DeFiLlama data, Ethereum-based DEX protocols processed $9.8 billion in the past week. Of this amount, $5.67 billion was handled by Arbitrum and Base alone, highlighting the shift to layer-2 solutions.
Monthly DEX volume on Ethereum has declined from $92 billion in December to $82 billion in February. March volumes are expected to be even lower.
This reduction in mainnet usage has impacted Ethereum’s fee revenue, which dropped from $218 million in December to just $46 million in February. While the recent Dencun upgrade reduced gas fees by 95%, making transactions less costly, overall revenue continues to fall.
Ethereum’s total value locked has also decreased, dropping from $76 billion in December to $46 billion currently. This metric indicates fewer assets are being used within the Ethereum ecosystem.
Institutional interest appears tepid as well. Spot Ethereum ETFs have experienced 12 straight days of outflows, totaling $370.6 million according to Farside data.
Some hope exists in potential regulatory developments. Both the New York Stock Exchange and Chicago Board Options Exchange have submitted requests to the SEC to permit staking in Ethereum ETFs, which could boost institutional involvement.
From a technical perspective, Ethereum is facing resistance at $2,042, with the 50-day moving average acting as a barrier. The RSI at 41.22 indicates recovery from oversold conditions but lacks strong momentum.
If ETH breaks above $2,042, the next targets are $2,163 and $2,370. However, if it fails to hold $1,986, it could decline toward $1,714, where previous buying interest emerged.
As crypto analyst Scott Melker noted,
“Either Ethereum bounces here and this is a generational bottom, or it’s over.”
The coming weeks may prove crucial for Ethereum’s price trajectory.
