Exchange Supply Dynamics
Ethereum balances on centralized exchanges fell to 8.7% last Thursday, marking the lowest level since the network launched in mid-2015 and setting up conditions for a potential supply squeeze.
The amount of Ether held on exchanges remained at 8.8% on Sunday, according to Glassnode data. Exchange balances have declined 43% since early July, around the time digital asset treasury purchasing activity began accelerating.
Market Commentary and Comparisons
Macro investment research feed Milk Road commented that Ethereum is entering its tightest supply environment ever. The current level represents uncharted territory for the network's exchange-held supply.
By comparison, Bitcoin exchange balances stood at 14.7%, according to Glassnode. The gap between the two assets highlights different holder behavior and custody preferences across the market.
Investor Behavior and Supply Destination
Ether continues flowing into destinations that do not typically sell, including staking protocols, restaking platforms, layer-2 networks, digital asset treasuries, collateral loops, and long-term custody solutions.
Milk Road suggested this ongoing withdrawal of supply from exchanges could drive price momentum as available selling inventory shrinks.
The research feed noted that sentiment feels heavy currently, but sentiment does not dictate supply dynamics. Ethereum supply is tightening in the background while the market determines its next move, and when that gap closes, price typically follows.
Technical Analysis and Momentum Indicators
Analyst Sykodelic identified an On-Balance Volume breakout above resistance on Friday, though price was rejected at that level. The divergence between volume momentum and price action signals hidden buying strength that often precedes upside moves, according to the analyst.
Sykodelic said OBV tends to be one of the most reliable leading indicators, and the current setup combined with bullish price action suggests higher levels before any meaningful pullback. The analyst expects the technical picture to improve as momentum builds.
Price Action and Relative Strength
Ethereum prices have held above $3,000 for five days but have not broken resistance at $3,200. Over the past 24 hours, the asset consolidated around $3,050.
Ether's price performance against Bitcoin also drew attention last week, with the ETH/BTC pair breaking above its downtrend line and suggesting relative strength compared to the broader market.