Ethereum Exchange Supply Is Rapidly Falling, Is A Supply Shock Incoming?

Crypto News

Ethereum’s exchange supply has plunged to its lowest level in over six years, dropping by nearly 41% since 2022, according to data from CryptoQuant.

This rapid drawdown raises alarms about a potential supply shock. With fewer coins for trading, even modest demand could fuel significant price swings.

As the Ethereum price stabilizes above $3,950, its viral ecosystem is also gaining attention: Remittix (RTX). This PayFi project offers borderless payments across 30+ countries, making it a must-watch token this cycle.

Ethereum Exchange Supply Falls Sharply

A recent CryptoQuant report suggests the decreasing ETH balance on exchanges is attributable to long-term asset holders increasingly staking their assets or moving them into self-custodial wallets.

Ethereum Exchange Reserve | Source: CryptoQuant

Over less than three years, exchange balances have declined by over 11 million ETH. Only about 15.9 million ETH now sits on centralized exchanges, down from 27 million ETH two years ago, signaling one of the sharpest liquidity contractions in the asset’s history.

This has created what analysts call an illiquid market structure. Price changes could be significant if buying pressure increases. Ethereum stakers continue to act, locking 32.8 million ETH within validator contracts, representing 30% of the total supply.

Shifting to lower exchange reserves with a rising outlook of staking participation may support price momentum. Analysts believe that macroeconomic catalysts or the influx of institutional capital are the next forces to impact the market.

Ethereum ETFs Record Heavy Outflows as Investors Reposition

Despite strengthening fundamentals on-chain, Ethereum ETFs saw notable weakness this week. On October 23, spot ETH ETFs recorded net outflows of $128 million, according to SoSoValue, marking the eighth negative flow day in the past eleven sessions.

Fidelity’s Ethereum Fund (FETH) led withdrawals with $77 million, while BlackRock’s ETHA saw $23 million in exits. Grayscale’s ETHE trust also posted over $8.8 million in outflows. The synchronized retreat suggests institutions temporarily rotate toward other assets amid cautious macro sentiment.

Since launch, cumulative inflows for Ethereum ETFs still exceed $14.4 billion. With Ethereum’s tighter supply and higher staking yields, analysts believe ETF outflows will have less long-term impact on Ethereum than the on-chain scarcity story.

Ethereum Price Flips Positive As the Market Awaits CPI Data

Ethereum trades at about $3,950, with a daily increase of about 2.48%. The rise follows a recent crypto crash that pushed the price below $3,500. With the falling exchange supply, ETH holders seem to be playing the long-term game.

Meanwhile, the markets await today’s key US Consumer Price Index (CPI) reading, and a weaker-than-expected print could see risk appetite return, potentially pushing the ETH price above the psychological level of $4,000.

Ethereum Price Chart | Source: CoinGecko

Any upside inflation surprise may stall ETH at support near $3,745. Technicals are neutral with the RSI near 46, and ETH’s next move is likely to be determined by macro outcomes rather than the flows in the derivatives market.

Attention Turns to Remittix Amid Ethereum Wait-and-Play Game

While Ethereum might have to wait for clearer macroeconomic and institutional support, Remittix (RTX) drives blockchain forward with smooth cross-border payments, building the bridge between decentralized finance and the real world.

Remittix is a crypto-to-fiat payment system built on Ethereum and other leading blockchains. Users can send cryptocurrencies to bank accounts in 30+ countries without intermediaries.

Here is why RTX is worth watching this cycle:

Add in its 15% USDT referral program and $250,000 giveaway, and it’s no surprise the token has gone viral among early investors. They have accumulated over 681 million RTX tokens, amounting to $27.7 million, ahead of its upcoming CEX debut.

Discover the future of PayFi with Remittix by checking out their project here:

Website: https://remittix.io/

Socials: https://linktr.ee/remittix

$250,000 Giveaway: https://gleam.io/competitions/nz84L-250000-remittix-giveaway

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Author

Krasimir Rusev is a journalist with many years of experience in covering cryptocurrencies and financial markets. He specializes in analysis, news, and forecasts for digital assets, providing readers with in-depth and reliable information on the latest market trends. His expertise and professionalism make him a valuable source of information for investors, traders, and anyone who follows the dynamics of the crypto world.