Ethereum is entering a rare phase. The amount of ETH sitting on exchanges has fallen to levels last seen in twenty sixteen. This means far fewer coins are ready to sell at any moment. At the same time large companies and institutions are adding more ETH quietly and steadily.
New data shows the exchange supply ratio is now very low. This tells us most Ethereum is no longer held for quick trades. Instead it is being stored for longer use. In past cycles similar moments came before strong price moves. When supply dries up even small demand can move price fast.
What makes this phase different is who is buying. It is not only retail users. Public companies and large groups are now holding Ethereum in their treasuries. The number of these holders keeps growing. Together they now control millions of ETH. The value of these holdings has risen sharply over recent months.
One firm in particular added a very large amount of ETH in just thirty days. This was one of the fastest accumulation runs ever seen from a public entity. Moves like this were rare in earlier cycles. This adds a new layer of demand that did not exist before.
There are several reasons why Ethereum supply is tightening. A big share of ETH is locked in staking. These coins help secure the network and cannot be sold easily. Another large share sits inside layer two networks. These systems use ETH for fees and activity which pulls liquidity away from exchanges.
More companies now treat ETH as a working asset. They use it for apps payments and on chain systems. This changes how ETH is held. Instead of trading it they keep it ready for use. Long term holders are also choosing self custody more often. They move coins off exchanges and hold them directly.
All of this reduces sell pressure. When fewer coins are available to sell prices tend to react faster to demand. This does not guarantee a price jump tomorrow. But it changes the structure of the market.
Ethereum price has been unstable in recent weeks. It traded near twenty nine hundred and struggled to find direction. Short term moves still depend on the wider market. But under the surface the setup is shifting.
If this trend continues Ethereum could face a supply shock. That happens when demand stays steady or rises while supply stays tight. In those moments price can move faster than expected.
This cycle looks different from the past. Before retail demand led the way. Now long term demand from institutions plays a bigger role. These buyers tend to move slowly and quietly. They do not chase fast pumps. They build positions over time.
That patience can support price during weak periods. It can also limit deep drops since fewer coins sit ready to sell.
Ethereum today feels calm on the surface. But the supply picture tells another story. Coins are leaving exchanges. Big holders are adding. Liquidity is shrinking.
This does not promise instant gains. It does suggest strong long term support. Ethereum may be setting the stage for a powerful move when demand returns.
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