Bitcoin and Ethereum are showing renewed supply imbalance
Similar patterns led to price drops in past market cycles
Analysts caution a possible repeat of the previous downturn
The crypto market is once again witnessing a significant supply imbalance between its two largest assets: Bitcoin and Ethereum. Historically, such imbalances have been early indicators of price corrections, and analysts are now warning that the same trend may be forming again.
The last time this imbalance intensified was when Bitcoin traded above the $100,000 mark. Back then, the market saw a sharp correction that brought prices back down. As the supply dynamics between BTC and ETH begin to shift similarly, traders are becoming cautious, fearing that history may repeat itself.
What Is Causing the Imbalance?
Supply imbalance occurs when there’s a major difference in how much of a cryptocurrency is available on the market versus the demand for it. In this case, both Bitcoin and Ethereum are seeing changes in exchange reserves, long-term holder behavior, and mining outputs.
Ethereum supply on exchanges has been increasing, possibly due to a slowdown in staking activity or investor caution. Meanwhile, Bitcoin continues to see strong holding patterns, with many coins moving into long-term storage. This divergence is creating tension in the market, with some suggesting that Ethereum may be at greater risk of price volatility.
The Supply Imbalance Between Bitcoin and Ethereum Is Intensifying Again
“Historically, this imbalance has only been corrected through price declines. That is exactly what happened above the $100,000 level, and the same pattern is now reemerging.” – By @mignoletkr pic.twitter.com/qBEhv9HlE5
— CryptoQuant.com (@cryptoquant_com) December 18, 2025
Could This Lead to Another Correction?
Crypto analysts point out that the last major supply imbalance resulted in a noticeable decline in prices. If the pattern repeats, Bitcoin and Ethereum could see short-term pressure before stabilizing again.
While not all imbalances lead to drastic corrections, the consistency of this trend in past cycles makes it worth watching. Investors are advised to track exchange flows and on-chain data to stay ahead of any sudden movements.
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