Ethereum Exchange Supply Ratio Drops to 0.037 Amid Stable Prices

Ethereum (ETH) has seen stable trading between $4,200 and $4,500 after reaching an all-time high of $4,956 on August 23. Recent data indicates a potential supply crunch as the Binance Exchange Supply Ratio (ESR) dropped from 0.041 to 0.037 between August 16 and September 3.

Key Insights

ETH's price remained around $4,400 despite the decline in ESR.
Investors are withdrawing ETH from exchanges, indicating increased confidence in self-custody.
Stable prices combined with declining exchange supply and healthy ETF inflows suggest dwindling sellable supply amid strong demand.
Historically, declines in ESR have led to upward price movements due to reduced liquidity.

Market Predictions

If ESR continues to fall without a price drop, it may signal a new bull cycle driven by institutional investors.
A decrease in leverage and neutral funding rates for perpetual futures indicate reduced speculative trading.
On-chain activity from ETH whales has decreased, suggesting long-term holders are retaining their assets.
36 million ETH has been staked, potentially leading to a supply shock.
Ethereum daily transactions reached a 12-month high.

As of now, ETH trades at $4,295, down 1.7% over the past 24 hours.