Ethereum enters a pivotal moment in its market structure, with two major on-chain and technical signals drawing sharp attention from traders. Fresh data shows a rapid decline in ETH held on exchanges, while long-term trend analysis highlights a support zone that traders view as the final line before potential downside acceleration.
ETH Exchange Balances Drop to Multi-Year Lows
The chart from Crypto Rover shows a steep and persistent decline in Ethereum supply held on centralized exchanges throughout 2025. Balances have fallen from above 16 million ETH at the start of the year to nearly 12.5 million ETH by early December.
A red trend arrow highlights that the acceleration lower has intensified over the last three months, even as price fluctuated between roughly $2,500 and $4,000. Historically, such sustained outflows indicate long-term accumulation, reduced sell-side pressure, and stronger conviction among holders who prefer self-custody.
The chart also overlays ETH price movements across the same period, showing that despite heavy exchange withdrawals, market volatility remains elevated. This divergence, falling supply with unstable price, often signals a buildup toward a sharper directional move.
Merlijn The Trader Warns: “Last Support Standing”
A separate chart shared by Merlijn The Trader outlines Ethereum’s macro structure across three major cycles: 2016–2018, 2018–2021, and 2022–2025. Each cycle shows a rising trendline meeting a horizontal resistance band, forming a broad ascending structure.
Merlijn notes that in prior cycles, once this rising base cracked, Ethereum entered deep retracements. His chart marks these breakdowns with downward arrows, reinforcing the pattern’s historical significance.
For the current 2022–2025 structure, the chart shows Ethereum pressing against the same long-term support. Merlijn states that:
- •The base from 2022–2025 is cracking.
- •Lose this zone… and there’s nothing below but air.
- •This is not FUD. This is the chart screaming.
The message is clear: if the ascending base fails, prior cycles suggest a sharp leg down becomes likely.
How the Two Signals Intersect
The combination of rapidly shrinking exchange supply and mounting technical pressure creates a unique crossroads:
- •On-chain data implies reduced immediate selling risk. Many traders would view this as bullish in isolation.
- •Macro technical structure, however, warns that Ethereum is testing a multi-year support that historically precedes major corrections when breached.
This clash of signals is why traders are watching Ethereum closely. If the support zone holds, diminishing exchange supply could accelerate a rebound. If it breaks, technical precedent favors a deeper drop—even with bullish supply dynamics in place.