When everyone is focused on the ETF capital flow of Bitcoin, smart money has quietly turned to a more fundamental indicator: the ETH balance on exchanges is quietly depleting.
As an analyst who has been in the crypto market for many years, I have never paid as much attention to the ETH reserves on exchanges as I do now. The latest data shows that the ETH supply on centralized exchanges has fallen to its lowest level since 2016, accounting for only 8.7% of the total circulating supply.
What does this mean? Simply put, of the 120 million ETH in circulation, less than 10.5 million remain on exchanges for buying and selling at any time. This level of supply tightening is unprecedented in Ethereum's nearly ten-year history.
01 Depleted Rivers: Exchange ETH reserves fall to historic lows
Looking back in history, the supply of ETH on exchanges surpassed 25 million in February 2023, after which it began a long downward trend. Now, this number has plummeted by more than 50%.
More importantly, this decline is not temporary but persistent and structural. Since September 2022, the amount of ETH held by non-exchange wallets has been steadily increasing. This is not retail behavior, but rather a strategic layout by market whales and institutional players.
I believe this creates a typical supply-demand squeeze setting: demand could explode at any moment, but the supply sources are depleting.
It's like a great river suddenly drying up, while downstream demand is increasing; a price rise is just a matter of time.
02 Behind the Scenes: The Collective Actions of Whales, Institutions, and ETFs
Who is sucking liquidity from exchanges? Data tells us that addresses holding between 1,000 and 100,000 ETH have cumulatively increased their holdings by 5.54 million ETH since April 2025, bringing their total balance to 45.2 million, an increase of 14%.
This is not a disorganized action, but an organized strategic shift.
On one hand, institutions like Bitmine have spent $435 million acquiring Ethereum, increasing their holdings to 3.2%. On the other hand, the narrative of publicly traded companies establishing ETH reserve funds is forming, with the total holdings of related companies now exceeding 2.329 million, worth $9.02 billion.
Even the Trump family-associated World Liberty Financial is actively increasing its holdings, with a recent purchase of ETH for $5 million.
Meanwhile, spot Ethereum ETFs also play an important role. As of July 2025, the historical cumulative net inflow into Ethereum spot ETFs has reached $9.4 billion, further draining the circulating supply from the market.
03 On-chain Signals: Why This Time Is Different?
As a veteran focused on fundamental data analysis, I must emphasize: a mere reduction in supply is only part of the story. The more critical signals come from the quality of on-chain activity.
Recently, whales holding between 100,000 and 1,000,000 ETH purchased over 280,000 ETH in just five days, worth about $1 billion. Such concentrated accumulation typically occurs before significant price fluctuations.
At the same time, net outflows from exchanges continue to increase, indicating that investors are moving assets into private wallets for long-term holding. This reduces immediate selling pressure and creates a more solid foundation for prices.
From a technical analysis perspective, Ethereum is currently holding above the key support level of $3,120. If it can effectively break through the resistance at $3,300, the next target could be in the range of $3,440, or even $3,630.
04 My View: Timing and Risk Warnings
If you ask me, an old-timer, to speak frankly: this may be a golden window for long-term investors to position themselves in ETH. Tight supply doesn't necessarily trigger an immediate price increase, but it creates an extremely fragile imbalance in the market.
Any positive catalyst could trigger a chain reaction.
However, I must also remind about several key risk points. First, the recent net outflow of funds from Ethereum ETFs indicates that institutional demand is still uneven. Second, if the price falls below the psychological threshold of $3,000, it could drop to $2,880 or even lower.
My advice is to adopt a staggered entry strategy rather than going all in at once. Focus on two levels: first, the support area of $3,100-$3,150, and second, the opportunity to chase after breaking through the $3,300 resistance.
For short-term traders, the current market structure still requires patience. For long-term holders, the risk-reward ratio here is quite enticing.
While most people are still tangled up in daily price fluctuations, the whales have already pointed the way with their actions. As exchange reserves continue to decline, the balance of supply and demand is increasingly tipping in favor of buyers.
It's like a bow being gradually drawn taut, with energy continuously accumulating, just waiting for a catalyst to release it. This catalyst could be institutional FOMO buying, a rate cut by the Federal Reserve, or the emergence of the next killer application in the Ethereum ecosystem.
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