The Exchange Reserve (Binance) is decreasing. This means ETH is being withdrawn from the exchange. Under normal circumstances, this decrease in supply would have a positive price effect. However, in the current situation, the price is also falling. This suggests that another, more dominant negative factor is at play. These factors are:

1. Derivative pressure outweighs spot pressure. The reserve represents the spot supply, but in the short term, the futures market determines the price the most. If:

The out-of-the-way (OI) is high,

Funding has turned negative,

The short side is aggressive, even if the spot supply decreases, derivative sales will push the price down. So, there is withdrawal in the spot market, but short pressure in derivatives may be stronger.

2. The withdrawn ETH may be for collateral, not for selling. When ETH is withdrawn from an exchange, it doesn't always mean HODL. It can be withdrawn for many reasons, such as using it as collateral in DeFi, OTC selling,

switching to L2/staking platforms,

transferring to other exchanges. So, Binance's reserves may be falling, but global selling pressure may not have ended

3. Demand is weak. A decrease in supply alone is not enough. If there are no new buyers entering, if stablecoin inflows are weak, and if risk appetite has decreased, even if supply decreases, the price will not react upwards. In this case, a scenario where sellers have decreased but there are no buyers also occurs.

4. Macro/Market Correlation

ETH does not move alone.

If BTC is weak, if DXY is strong,

If risk markets are under pressure,

Even if the reserves give a positive signal, the price may fall due to correlation.

5.Whales loading into derivatives

In some periods, whales may open short positions in derivatives while simultaneously withdrawing from spot markets. In this case, the reserves fall, but the price is suppressed.

In the chart, the reserves have recently been trending downwards again, and the SMAs are weak after a downward crossover. The price is around 2.9K, but there is a loss of momentum. In the short term, if derivative pressure continues, the decrease in reserves will not immediately push the price upwards. The price may first clean up liquidity. Lower support tests may be seen. That would be $1700. $ETH