Ethereum Is Leaving Exchanges: Could Supply at a Record Low Pave the Way for a Rally?
According to Santiment, Ethereum held on the exchanges it tracks has fallen to about 3.5% of the total supply, reaching a record low. The platform says this contraction could become significant for the amount of ETH available to buyers if demand strengthens.
Data shared by Santiment puts the share of ETH on exchanges at 3.49% of the total supply. The company reports that an amount equivalent to 1.16% of the total ETH supply has left exchanges since June 1. This figure describes withdrawals measured against the total supply, not just a 1.16% decline in exchange balances.
Exchange balances had already fallen over the summer to levels not seen since Ethereum’s early years. Santiment’s latest chart shows the decline continuing to new lows.
Where is the Ethereum leaving exchanges going?
Santiment says staking and decentralized finance (DeFi) use could help explain why some ETH is held outside exchanges. According to the estimate shared, about 35% of the total ETH supply is staked. DeFi applications on Ethereum, meanwhile, hold about $53 billion in value. This amount is not a balance made up solely of ETH, nor is it the total value of funds that have left exchanges since June.
The company also points to staking activity by large treasury holders. According to Santiment, BitMine reported staking more than 5 million ETH earlier this month. These examples do not prove where every ETH leaving exchanges went; they point to reasons for holding ETH outside exchanges.
Will lower exchange supply push prices higher?
Having less ETH on exchanges can mean that less is immediately available for sale on those platforms. According to Santiment, if demand rises while exchange supply remains low, buyers may compete for a more limited amount of readily available ETH.
However, declining exchange supply alone does not guarantee a rally. The metric covers the exchanges tracked by Santiment; it does not mean that ETH has disappeared from the total supply or that assets held outside exchanges can never be sold. The analysis identifies stronger demand alongside the supply contraction as the key condition for an effect on price.