Ethereum Supply Is Drying Up Fast And Every Time This Happened Before, a Massive Rally Followed

As you can see in the chart above, Ethereum exchange reserves keeps going down in quite fast ways and most people are not paying attention. These reserves are falling again and every time this has happened before its been the calm before a massive rally.

According to the Tweet and the chart:

• 2020-2021: ETH reserves dropped from 16M to 10M while price barely moved. At that time gas fees were sky high , the network was congested and most of the traders were asleep. Then demand suddenly pumped thanks to events like the UNI airdrop and ETH exploded from ~$400 to nearly $4,800.
• 2022-2023: This time another huge outflow happened. This time from 15M to 9M ETH. This happened during the deep in the bear market, FTX was collapsing, banks were failing but supply quietly bled off exchanges. Once macro conditions improved, ETH rocketed from ~$1,100 to ~$4,000.
• 2024-2025 (Now): We are currently sitting at historic lows (~9.2M ETH) while price is around $4000-$4,500. This means ETH is being accumulated and pulled off exchanges, even if price is not exploding yet.

This is important because supply leaving exchanges is like draining a bathtub while the tap is still running. If buyers keep coming and sellers eventually run dry, the result is explosive and the price surges because there is simply nothing left to sell and buyers still want it.

Lower interest rates, expanding liquidity, institutional money flowing back in. history suggests we are on the verge of another violent rally.

It's time to explore uncharted territory with ETH price.

Source:

• Tweet: https://x.com/LeonWaidmann/status/1973678958542819482