The share of Ether (ETH) held on centralized exchanges has fallen to record lows, raising the possibility of a future supply squeeze. Glassnode data showed exchange balances dipped to 8.7% last Thursday—the lowest level since Ethereum’s 2015 launch—and remained near 8.8% on Sunday.
Exchange-held ETH has declined roughly 43% since early July, a period that coincides with accelerating purchases by corporate and digital-asset treasuries. Macro research feed Milk Road warned ETH is ‘quietly entering its tightest supply environment ever,’ calling the current level unprecedented.
For context, Bitcoin balances on exchanges are higher, at about 14.7% per Glassnode. Milk Road highlighted that much of the missing ETH is increasingly locked up in places unlikely to be sold: staking and restaking, Layer-2 activity, corporate treasuries, collateral loops, and long-term custody. That shrinking available supply could amplify price momentum once market conditions turn.
As one commentary put it, ‘Sentiment feels heavy right now, but sentiment doesn’t dictate supply. ETH supply is tightening in the background while the market decides its next move. When that gap closes, price follows.’
On the technical side, analyst Sykodelic pointed to an On-Balance Volume (OBV) breakout above resistance, a volume-based momentum signal. Although price was rejected after the breakout—a divergence—this pattern can signal hidden buying strength that often precedes upside moves. The analyst noted that OBV has been a reliable leading indicator in their experience and that the price action looks bullish, potentially reaching new highs before any significant pullback.
Price action: Ether has largely held above $3,000 over the past five days but has struggled to clear resistance near $3,200. Over the last 24 hours, ETH has consolidated around roughly $3,050. The ETH/BTC pair also drew attention after breaking above a downtrend line, signaling relative strength versus Bitcoin.
Bottom line: Exchange balances at multi-year lows and growing on-chain lockups are tightening ETH’s effective supply. Combined with bullish volume signals, that backdrop could magnify future upside, though indicators are not guarantees and short-term sentiment remains mixed.
