Ethereum Faces Supply Crisis as Over 1M ETH Exits Exchanges, Price Soars 50%

Ethereum Faces Supply Crisis as Over 1M ETH Exits Exchanges, Price Soars 50%

Ethereum Exchange Outflows Spark Historic Supply Shock

Ethereum is undergoing its sharpest supply crunch since the 2021 bull run, with over 1 million ETH withdrawn from exchanges in just 30 days. This wave of outflows—equal to a 5.5% drop in exchange-held ETH—has left only 17 million ETH on major trading platforms.

In parallel, Ethereum’s price has climbed from $1,800 to nearly $2,700, marking a 50% surge. The move signals that investor appetite is outpacing available supply, triggering a classic setup where smart money accumulates early, and a supply-demand imbalance fuels higher valuations.

This is the largest outflow since 2021, and it suggests that ETH holders are preparing for another long-term rally.

Exchange Data Points to Long-Term Accumulation

The current trend began in late March, with a slow drawdown of Ethereum across exchanges. By mid-April, supply fell below 17.6 million ETH, and after May 5, outflows accelerated—over 400,000 ETH exited exchanges in just under two weeks.

Source: A chart showing Ethereum outflows and exchange-held supply levels will be inserted here.

This reduced exchange presence limits the potential for mass sell-offs, sharply weakening downward price pressure. Historical trends show that such conditions often precede strong upward moves, as seen in prior bull cycles.

Technical Indicators Signal Conflicting Market Sentiment

Despite the bullish trend, Ethereum’s short-term technicals suggest market tension. Currently, ETH trades between $2,500 support and $2,625 resistance.

• The MACD recently flashed a bullish crossover, typically a sign of further gains.

• Simultaneously, interest in Ethereum’s staking and restaking utilities is growing, attracting long-term buyers.

But not all signals point up.

• The RSI has entered overbought territory, increasing the risk of a near-term pullback.

• Large short positions remain active, hinting at profit-taking and hesitation from major traders.

This standoff underscores a volatile moment: a market brimming with bullish conviction but shadowed by cautious realism.

Where Ethereum Goes Next

If the supply shock continues, Ethereum could soon enter price discovery mode, where new highs are tested without resistance. However, should caution dominate, expect more sideways movement as institutional and retail investors recalibrate.

Either way, Ethereum’s reduced supply and heightened demand are setting the stage for major price developments in the coming weeks.