Ether exchange reserves hit 9-year low

Ether reserves across centralized exchanges have dropped to their lowest level in nearly nine years, reinforcing investor optimism that the market may be approaching a bottom and setting the stage for a recovery toward the $3,000 psychological threshold.

According to CryptoQuant data, on February 18, Ether reserves across all exchanges fell to 18.95 million, marking their lowest level since July 2016, when Ether was trading around $14.

Ether supply declines on exchanges, signaling a potential price rally

The decreasing Ether supply on exchanges could indicate an impending price rally driven by a “supply shock,” which occurs when strong buyer demand meets a shrinking available ETH supply, resulting in price appreciation.

However, according to TradingView data, Ether has struggled to gain momentum throughout the past year, falling over 3.67% on the yearly chart and dropping more than 19% year-to-date (YTD).

The decreasing supply of Ether on exchanges indicates that investors are withdrawing their ETH from cold storage wallets to hold onto for the long term.

Moving Ether supply off exchanges is a “generally bullish” signal, according to Nicolai Sondergaard, a research analyst at the Nansen crypto intelligence platform.

The analyst stated that they are seeing similar trends for BTC, which makes him wonder if we (a) are seeing demand outpace supply and (b) are experiencing a natural shift toward self-custody and cold storage.

According to the analyst, the shift is generally positive for both assets, even though other factors may contribute to the trend.

As per Vugar Usi Zade, chief operating officer at Bitget, a decreasing Ether supply suggests that “investors are shifting assets to cold storage rather than positioning for short-term sales, which historically “correlated with reduced sell-side pressure and price stabilization”.

Bitcoin exchange reserves drop to multi-year low as institutional demand grows

Bitcoin reserves on crypto exchanges have dropped to their lowest level since 2022. For now, only 2.5 million BTC remain. This indicator’s decline is seen as a sign of a supply shortage as institutional interest keeps rising, with the focus on ETFs demanding more Bitcoin.

Data from CryptoQuant also reveals that exchange reserves have not been this low since tracking began.

Market participants’ sentiment has been mixed, as Bitcoin ETFs saw their first weekly outflows of 2025. On Feb. 10, U.S. spot Bitcoin ETFs saw net negative outflows of $186 million, erasing the $171 million inflows seen the day before. 

Analysts believe this is a shift in the market equilibrium, not a trend. Even though ETFs saw outflows, the overall trend is positive due to institutions accumulating and reduced supply from long-term holders.

Ether, however, still faces significant resistance at $2,750 and $2,800. According to CoinGlass data, a potential rally beyond $2,800 could trigger over $822 million worth of leveraged short liquidations across all exchanges.

The potential introduction of staking ETFs could be a game-changer, further tightening Ethereum’s liquid supply and reinforcing its value proposition as a prime investment asset.

– Marcin Kazmierczak

Ether ETF issuers are anticipating regulatory approval for staking, according to Consensys founder Joe Lubin.

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