Ethereum Exchange Supply Drops 52% as $3,700 Liquidation Risk Grows

Ethereum’s exchange supply has dropped by more than 52% from their 2016 levels, hitting a low of about 14.8 million ETH. In addition, a respected market analyst has predicted a growing liquidation risk near the $3,700 price level. He has identified this as a critical support level. This creates a mix of long-term bullish signals and short-term downside pressure.

Ethereum Exchange Balances Hit Nine-Year Low While $3,700 Becomes Critical Support

Data from Glassnode confirms that balances held on exchanges have fallen sharply from a peak of roughly 31 million ETH to just 14.8 million ETH today, marking a 52% drop. This is the lowest level since 2016 and suggests investors are moving their coins elsewhere.

This could be staking contracts, cold wallets and institutional custody. The launch of the first Ethereum staking ETF has also boosted demand for the coin. Hence, this makes sudden price swings more likely when demand or sell pressure rises.

In addition, crypto analyst Ted (@TedPillows) has highlighted growing liquidation risks around $3,700 to $3,800. He noted that this price zone could be tested again before Ethereum finds stability.

If ETH drops below $3,700, large amounts of leveraged positions may be wiped out, creating a wave of forced selling. This low supply and concentrated leverage have weakened Ethereum’s short-term outlook. Using Pillows analysis, the bulls need to defend the $3,700 to USD 3,800 to ensure there are no further losses.

$ETH liquidity heatmap is showing decent long liquidations around the $3,700-$3,800 level.

This level could be revisited again before Ethereum shows any recovery. pic.twitter.com/SQTbfrujAa

— Ted (@TedPillows) September 27, 2025

According to current TradingView data, ETH price is at $4,011, down nearly 0.33% in the past 24 hours and more than 10% over the past week. The price briefly dipped below $3,980 earlier in the session before recovering. However, it remains under its recent close of $4,034.

Whales Accumulate $1.73B in ETH as Institutions Buy the Dip

The supply drop and liquidation risk create a double-edged scenario. On one hand, record low balances show conviction among holders. It also proves Ethereum’s growing role in decentralized finance and institutional portfolios.

Meanwhile, 16 wallets bought 431,018 ETH from September 25 to 27 for a total of $1.73 billion, as Lookonchain data shows. Similar Ethereum whale activity was seen earlier, when $204 million worth of the token was accumulated.

These inflows poured in from Kraken, Galaxy Digital, BitGo, FalconX and OKX. Also, they highlight how deep-pocketed buyers are positioning during the current market pullback. The scale of these transactions shows that retail sentiment may be cautious. However, institutional and whale demand for ETH remains strong.

Whales keep accumulating $ETH!

16 wallets have received 431,018 $ETH($1.73B) from #Kraken, #GalaxyDigital, #BitGo, #FalconX and #OKX in the past 3 days.https://t.co/0DPxgZMGN7 https://t.co/xtPLBKo9LZ pic.twitter.com/oEXZKIErmr

— Lookonchain (@lookonchain) September 27, 2025