BlockBeats News, December 7, Ethereum’s balance on centralized exchanges has dropped to a historic low, triggering analyst warnings of a Supply Squeeze. The latest data shows:
The ETH reserves on exchanges fell to only 8.7% of the circulating supply last Thursday, the lowest since the network’s launch in 2015. As of Sunday, it remains at just 8.8%, staying in an extremely low range. Since July, the ETH balance on exchanges has plummeted by 43%. Meanwhile, institutional and Digital Asset Treasury (DAT) holdings have seen significant growth.
Research firm Milk Road pointed out: “ETH is quietly entering the most supply-constrained environment in history, which is unprecedented.” In contrast, Bitcoin’s exchange reserve still stands at 14.7%. Analysts believe that a large amount of ETH is locked in scenarios where quick selling is not possible, including:
Staking & Restaking
Layer2 activities
DAT Treasury
Mortgage loops
Long-term custody
Milk Road stated that the supply squeeze could drive prices upwards after a sentiment shift: “Sentiment can be bearish, but sentiment cannot change the supply structure. When sentiment is misaligned with supply, price will eventually follow the supply change.” Analyst Sykodelic also noted that Ethereum’s On-Balance Volume (OBV) broke through a resistance level but was briefly rejected, indicating a typical “divergence,” which often heralds hidden buying pressure, building momentum for further upside.
