ETH exchange reserves hit a historic low. Will the supply squeeze trigger a market rally?

[Crypto World] Recently, I’ve noticed an interesting phenomenon—the amount of ETH held on major exchanges has dropped to an all-time low, down to just about 8.8%. This number is basically back to where it was in 2015 when ETH first launched.

Even more striking is that from July this year until now, the ETH on exchanges has shrunk by 43%. Coincidentally, this timeframe matches the period when digital asset treasuries started aggressively accumulating coins. For comparison, Bitcoin’s share on exchanges is still at 14.7%, which is noticeably more abundant than ETH.

So where has all this ETH gone? The answer is pretty obvious—staking, restaking, Layer 2 activities, institutional custody, collateralized lending cycles, and various long-term lock-up operations. These channels all have one thing in common: it’s not that easy to sell from them.

Market sentiment is indeed a bit bearish right now, but emotions aside, supply is a hard fact. ETH’s circulating supply is quietly tightening up, and the market is actually gearing up for a big move. Once this supply-demand gap really bursts, where the price goes could become very clear. After all, most of the tokens are tightly locked up—it’s just a matter of when the market catches on.