Ether struggles below $2,800 despite exchange supply hitting record low
Ether struggles below $2,800
Ether (ETH) reserves across centralized exchanges have fallen to their lowest level in nearly nine years, reinforcing investor optimism about a potential price rally.
However, despite the sharp decline in exchange supply, ETH has struggled to break above the $2,800 resistance level, according to the Cryptopolitan.
According to CryptoQuant data, as of February 18, Ether reserves on exchanges dropped to 18.95 million—the lowest since July 2016, when ETH traded at approximately $14. A declining exchange supply is typically seen as a bullish signal, as it suggests investors are moving their assets into self-custody rather than preparing for short-term sales.
Supply shock could fuel future gains
A tightening Ether supply could lead to a price rally driven by a “supply shock,” where increasing demand meets a shrinking available supply. This phenomenon has historically preceded significant price increases in crypto markets.
Nicolai Sondergaard, a research analyst at Nansen, noted that Bitcoin is experiencing a similar trend, suggesting a broader shift in investor behavior toward long-term holding and self-custody. "This indicates reduced sell-side pressure, which often stabilizes prices," added Bitget COO Vugar Usi Zade.
Despite these indicators, ETH remains below key resistance levels. Data from CoinGlass shows that a breakout above $2,800 could trigger the liquidation of over $822 million in leveraged short positions, potentially accelerating price gains.
Market participants are also watching regulatory developments, particularly regarding Ether exchange-traded funds (ETFs). The potential approval of staking-enabled ETFs could further tighten Ethereum’s liquid supply, providing an additional catalyst for price appreciation.
Meanwhile, Ethereum validators have signaled majority approval for increasing the network’s gas limit, pushing it past 34 million for the first time since 2021.
