Ethereum Supply Crunch Looms as Whales Stack 1.29M ETH

Ethereum (ETH) may be on the verge of a supply crunch, as exchange reserves dwindle amid heavy accumulation by whales and growing institutional demand. ETH’s exchange supply is currently at record lows, while whales have bought 1.29 million tokens within one month. At the same time, the volume of staked ETH is at a record high. As demand surges, what does this looming squeeze mean for Ethereum price? Is it the catalyst that pushes ETH above $4,000?

Ethereum Faces a Supply Squeeze

Ethereum is flashing signs of a supply squeeze as several on-chain indicators point towards a tightening supply. One of these indicators is ETH’s supply on exchanges, which recently fell to 7.3 million ETH, which is the lowest level since 2015.

The falling supply shows several things. The first is that traders are withdrawing their tokens from exchanges and moving them to cold wallets, and this alleviates the immediate sell-side pressure. Secondly, the declining supply could also show increased Ethereum network usage as ETH gains utility.

Analyst CryptoGoos on X noted that the Ethereum blockchain was indeed recording a surge in activity after topping all networks in bridged netflows in the last 24 hours.

Traders could also be moving ETH tokens from centralized exchanges to staking platforms, which also shows a willingness to hold for the long term. Data from BeaconChain shows that the amount of staked ETH tokens has surged to 34,694,490 ETH, which is the highest amount in history.

As staking activity rises, the implications for Ethereum price could be positive, as more tokens are removed from exchanges. With retail and institutional traders looking to scoop up the ETH tokens available on exchanges, it could lead to an explosive move.

Whales Scoop 1.29M Tokens

Ethereum whales have been actively accumulating ETH tokens, as seen on Santiment’s data. The addresses holding more than 10,000 ETH tokens have expanded their positions significantly, and their holdings have increased by 1.28 million within one month. The total supply controlled by these wallets has increased from 25.23 million tokens on May 14 to 26.52 million.

Besides whales, institutions are also buying ETH. As CoinGape reported, Sharplink Gaming purchased 176,271 ETH tokens valued at more than $463 million, making it the largest publicly traded Ethereum holder. Spot ETH ETFs have also been in one of the longest inflow streaks.

When large traders are buying when fewer ETH tokens are available on exchanges, it increases the likelihood of a supply squeeze.

What Does the Looming Supply Crunch Mean for Ethereum Price?

A looming supply crunch is generally bullish for Ethereum price as it coincides with surging demand. As more ETH leaves exchanges, the price becomes sensitive to rising demand. Therefore, as accumulation continues, ETH price could post notable gains and possibly reach $4,000.

The supply squeeze could also align with breakout conditions. As recent CoinGape analysis reported, Ethereum price broke out of a 30-day range as buyers and sellers remained on the sidelines. However, ETH fell back to this consolidation range during the recent crypto crash. The looming supply crunch could be the catalyst for a price breakout.

In summary, Ethereum could be at a tipping point as the available supply on exchanges falls to record lows. Meanwhile, whales and institutions are aggressively scooping ETH tokens, which could trigger an explosive move.

As the long-term outlook flips bullish, discover what to expect in the Ethereum price prediction from 2025 to 2030.