Ethereum had a relatively quiet weekend, with price action showing signs of stability after last week’s volatility. ETH has reclaimed the $4,100 level, and analysts now point to the $4,000 mark as a crucial line of defense. If bulls manage to hold above this support, the market could see a strong surge in the coming days, setting the stage for Ethereum to retest higher levels. Related Reading: Ethereum OI Suffers Its Biggest Cleanup Since Early 2024 – Details Adding weight to this outlook, a key report by CryptoQuant highlights that Ethereum supply on spot exchanges continues to decline. This trend often signals that investors are withdrawing ETH to self-custody or staking, reducing available sell-side liquidity on exchanges. Historically, such declines in exchange reserves have paved the way for rallies, as demand eventually absorbs the reduced supply. However, while the data is supportive, analysts caution that the real catalyst remains demand. Without strong inflows of new buyers, supply-side reductions alone may not be enough to push ETH significantly higher. The coming days will therefore be critical, with Ethereum’s ability to hold above $4,000 serving as a key indicator of whether the next leg of the rally is ready to unfold. Ethereum Outflows Point to Long-Term Bullish Setup According to the CryptoQuant report, recent Ethereum outflows from spot exchanges are largely tied to new buys, where investors purchase ETH and immediately move it into self-custody or staking. This behavior reduces sell-side liquidity and, over time, can create the foundation for price appreciation. Looking at past cycles, clear patterns emerge: Network Congestion & UNI Airdrops: During this phase, high gas fees and strong macro tailwinds fueled demand. Outflows accelerated, leading to a robust bull run as liquidity tightened. Late Bear Phase & FTX Collapse: At the peak of quantitative tightening (QT), the FTX crisis sparked a bank run, with older coins leaving exchanges. Despite fear, improving macro conditions soon restored demand, driving ETH higher. We see the same trend today: reserves are falling, yet prices remain flat as selling offsets new buying. Historically, once demand strengthens, these periods lead to rallies. Importantly, this is not a supply shock in the strict financial sense. Instead, it reflects reduced exchange reserves and lower sell-side pressure. The question is whether demand will accelerate. If rate cuts, slower QT, and rising global liquidity continue, ETH could be primed for a strong long-term move. In the meantime, price volatility is expected. If ETH dips below the accumulating whales’ realized price, it may offer a buying opportunity, just as it has in past cycles. This dynamic shows investor trust in Ethereum and reinforces the view that falling reserves prepare the ground for the next rally. Related Reading: MrBeast Enters The Aster Game: $1M Buy Signals Growing Interest Price Action Details: Relief Rally Or Recovery? Ethereum (ETH) is attempting to stabilize after its sharp drop below the $4,000 level, with the latest chart showing a modest recovery to around $4,131. The bounce comes after ETH briefly tested lows near $3,900, suggesting that buyers are stepping in to defend this critical support area. On the 8-hour chart, ETH has reclaimed the 200-day EMA (red line), which is now acting as a short-term pivot point. However, the 50-day (blue) and 100-day (green) moving averages remain above the current price, creating overhead resistance between $4,250 and $4,400. A clean break and consolidation above these levels will be necessary for bulls to regain momentum and target higher ranges toward $4,600. Related Reading: 11 Wallets Receive 295,861 Ethereum ($1.19B) From Major Institutions: Accumulation Or OTC Shuffle? For now, ETH’s structure is fragile. The recent rejection from $4,600 and the subsequent breakdown highlight the intensity of selling pressure. Still, the rebound from sub-$4,000 levels signals that demand remains strong, particularly from accumulation wallets and whales, which have been absorbing supply. If ETH holds above $4,000 and pushes through $4,250, the market could enter a recovery phase. Conversely, failure to maintain this rebound may expose ETH to a retest of $3,800 or even lower support zones. The coming sessions will be critical in defining ETH’s short-term trend. Featured image from Dall-E, chart from TradingView
On-chain data shows the Ethereum Exchange Reserve has plunged by more than 1 million ETH over the past month. What does this mean for the asset? Ethereum Exchange Reserve Has Seen A Sharp Decline In a new post on X, analyst Ali Martinez has talked about the latest trend in the Exchange Reserve of Ethereum. The “Exchange Reserve” here refers to an on-chain indicator that keeps track of the total amount of ETH that’s sitting in the wallets associated with centralized exchanges. When the value of this metric goes down, it means the investors are withdrawing a net number of coins from these platforms. Generally, holders take their coins to self-custodial wallets when they plan to hold into the long term, so such a trend can be a bullish sign for the cryptocurrency. Related Reading: Bitcoin Remains Flat—And The SSR Ratio Might Explain Why On the other hand, the indicator’s value observing a decline suggests the inflows into exchanges outweigh the outflows. As one of the main reasons why investors use exchanges is for selling-related purposes, this kind of trend could be bearish for the asset’s price. Now, here is the chart shared by the analyst that shows how the Exchange Reserve for Ethereum has changed during the last few months: As displayed in the above graph, the Ethereum Exchange Reserve has seen a sharp drop recently, implying the investors have withdrawn a large amount of the asset. More specifically, the holder have taken out more than 1 million tokens of the cryptocurrency (worth about $3.8 billion at the current price) from the exchanges over the past month. Alongside this withdrawal spree, the ETH price has enjoyed a bull rally beyond the $3,800 level, indicating that the accumulation wave could be a driving factor behind it. The Exchange Reserve may be to keep an eye on now, as where it heads next could also end up having an effect on the asset. In some other news, the Ethereum Taker Sell Volume has just seen a sharp spike, as CryptoQuant community analyst Maartunn has pointed out in an X post. The Taker Sell Volume here refers to a metric that keeps track of the volume of sell orders (in USD) that are being filed by traders in Ethereum perpetual swaps. From the chart, it’s apparent that this metric has just observed two huge spikes. Across these, Taker Sell Volume has totaled at a whopping $2.68 billion. Related Reading: Bitcoin Open Interest Sets New Record As Price Plunges To $115,000 Whether this reflects a shift in market sentiment or just short-term positioning remains to be seen. ETH Price While altcoins like XRP and Dogecoin have seen pullbacks during the past week, Ethereum has managed to do relatively well as its price is trading around $3,800. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com