Ethereum (ETH) shows all the signs of a textbook supply shock, with record-low exchange balances, surging staking demand, and accelerating institutional inflows.
Yet despite this tightening supply, the Ethereum price remains flat, leaving analysts debating whether retail selling is masking one of the most bullish setups in years.
Ethereum Supply Drains While Bitcoin’s Climbs
SponsoredAccording to analyst Crypto Gucci, ETH reserves on centralized exchanges have fallen to fresh lows even as Bitcoin (BTC) exchange balances spike to multi-month highs.
“Investors are hoarding ETH and dumping BTC…ETH supply shock incoming,” the analyst warned.
The divergence highlights a growing conviction in Ethereum’s long-term value proposition, even as short-term price action lags.
Meanwhile,on-chain data confirms that ETH is being locked up at historic rates. Specifically, Ethereum’s staking entry queue has surged to its highest level since 2023. Additionally, 860,369 ETH worth $3.7 billion are currently waiting to be staked.
Everstake, a staking protocol, noted this is the largest queue since the Shanghai upgrade enabled withdrawals two years ago.
“More people trust Ethereum’s long-term value and want to participate in securing it,” the firm stated.
Everstake also pointed to a mix of institutional participation, favorable market conditions, and growing network confidence.
Sponsored SponsoredAt present, more than 35.6 million ETH is already staked. This portion, constituting 31% of the total supply, is worth about $162 billion.
Institutions and Treasuries Load Up on Ethereum
Meanwhile, institutional appetite is playing a central role. Analyst Hasu observed that nearly 10% of ETH’s supply is now held in publicly traded vehicles, a milestone reflecting adoption.
Tom Dunleavy, head of venture at Varys Capital, added that treasury companies scooped up over 3% of the total ETH supply in just two months. This highlights the rapid pace of accumulation.
“Wild that in less than 2 months, over 3% of the entire supply of ETH was scooped up by treasury companies,” wrote Dunleavy.
Corporate treasuries already hold 4.7 million ETH, or $20.4 billion, with most committed to staking strategies.
This has helped push the validator entry queue to record levels. At the same time, it has reduced the risk of a mass exodus, as the exit queue has declined 20% since August.
Retail Selling Meets Ethereum Whale Accumulation
Despite these bullish flows, ETH is trading at $4,368 as of this writing. It is down over 12% from its August 24 all-time high, with analysts saying retail selling suppresses price momentum.
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Defi Ignas notes that 100–1,000 ETH holders are dumping, while whales in the 10,000–100,000 ETH range are “loading fast.” The analyst calls it the same setup seen before every major ETH rally, where supply shifts from weak to strong hands.
Similarly, Sigil Fund CIO Dady Fiskantes suggested some investors may be rotating spot ETH into Ethereum ETFs (exchange-traded funds) to reduce custody risks, similar to earlier Bitcoin flows.
However, Ignas questioned the timing, contradicting the notion that ETH whales operate like large holders of Bitcoin. Others hold a more bullish view.
“…retail’s exit liquidity has always been the ignition fuel. Once they’re fully flushed out, ETH rips. The flat price is the bullish signal,” analyst Tradinator remarked.
Analysts argue that the fundamentals are set for an explosive move. The Ethereum price is trapped between strong institutional accumulation and persistent retail selling, exchange reserves at record lows, and staking queues at record highs.
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