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Ethereum Flashes 3 On-Chain Signals That Buyers Are Still Around

Source Beincrypto

Ethereum (ETH) is flashing 3 bullish on-chain signals as exchange supply shrinks, priority fees climb, and Binance stablecoin reserves rebuild.

The signals come after ETH rallied from around $1,900 to $2,800 before pulling back. The asset now trades near $2,678, up about 8% over the past week, BeInCrypto Markets data shows.

Ethereum Keeps Draining Off Exchange Order Books

Santiment data shows just 3.49% of ETH supply now sits on tracked exchanges. Another 1.16% of total supply has moved off these platforms since June 1.

The firm added that exchange balances had already sunk to levels last seen in Ethereum’s first years this summer. The drop extends a slide in exchange reserves since January. Fewer coins on exchanges leave less ETH ready to sell.

“But it reduces the pool of ETH readily available to hit the market during the next wave of selling,” the firm added.

Ethereum Supply on Exchanges. Source: X/Santiment

Staking and Decentralized Finance (DeFi) help explain where the coins are going. Santiment estimates roughly 35% of ETH is staked, while Ethereum holds about $53 billion in DeFi value.

Corporate treasuries also keep coins off exchanges. BitMine holds 5.98 million, with 85% of its holdings staked.

“If demand strengthens while available exchange supply stays this scarce, buyers have fewer immediately available coins to compete for,” the team added.

Traders Pay Up to Jump the Block Space Queue

On the demand side,an analyst citing CryptoQuant data noted that priority fees rose 26.74% in a single day to about $464,000.

Gas used, however, climbed only 0.26% to roughly 217.1 billion. Blocks mined held near 7,147, so higher block production did not drive the fee jump.

“The lack of a significant decline in gas usage suggests that demand for Ethereum block space has not weakened substantially despite the price pullback,” the post read.

The analyst interpreted this gap as users paying more for faster processing. That points to stiffer competition for the same block capacity.

Stablecoin Dry Powder Refills on Binance

Lastly, XWIN Japan tracked Binance’s ERC-20 stablecoin reserves. They recovered to about $43.8 billion from an August low near $42 billion.

The analyst described exchange stablecoins as potential buying power for Bitcoin (BTC) and other crypto assets. However, reserves still trail the roughly $49 billion recorded earlier this year.

What Could Knock the Setup Off Course

Each signal carries caveats. Santiment stressed that thin exchange supply does not guarantee higher prices. XWIN Japan also warned that reserves may sit idle or back derivatives positions.

On price, the analyst tracking network activity flagged $2,600 to $2,650 as support. Holding that zone could set up a retest of $2,700 to $2,800.

Meanwhile, a sharp drop in priority fees with weaker gas usage would pressure the $2,600 level, the analyst warned. The coming sessions should show whether fee competition can outlast the cooling price momentum.

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Disclaimer: For information purposes only. Past performance is not indicative of future results.

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