‘Supply squeeze’ coming? Ethereum stock drops to 10-year low

Ethereum (ETH), the largest altcoin in the crypto market, is once again on the rise. Since the beginning of December, the price has risen from 2,750 to more than 3,200 dollars per token. Although that increase was not completely sustained, several signals point to an impending ‘supply squeeze’ that could potentially cause fireworks.

Ethereum stock on exchanges at historic lows

Data from CryptoQuant shows that Ethereum’s stock on crypto exchanges has fallen to the lowest level in a decade. Only 8.8 percent of the total number of ETH tokens are still on exchanges. Such low levels were last seen around the network’s launch in 2015.

The decline in reserves has been going on for months. Since July, the supply at trade fairs has decreased by about 43 percent. More and more investors are taking their ETH off the exchange and using the coins for staking, restaking, layer-2 protocols or long-term storage.

This structurally lower supply increases the risk of a ‘supply squeeze’ – a situation in which demand increases sharply while the available supply decreases. In the crypto market, this often leads to rapid price increases.

Analyst sees bullish signals in Ethereum price

The Ethereum price recently tried to break through the $ 3,200 barrier, but was rejected at that level. Yet the analyst “Sykodelic” sees hopeful signals. According to his analysis on

Although the increase was reversed, this points to a so-called divergence. Historically, this often precedes upward movements. “If buying pressure continues, Ethereum could quickly enter a new bullish trend,” Sykodelic said.

On Sunday, the price rebounded with a rise of three percent, after falling back earlier in the day. This means that ETH is once again moving above the psychological limit of $3,000. The coming days will show whether the momentum continues.