Ethereum Exchange Reserves Fall to 8.7% of Circulation, Sparking a Historic Supply Squeeze and Potential Price Rally

COINOTAG News reports that Ethereum‘s balance on centralized exchanges has sunk to historic lows, suggesting a looming supply squeeze. Fresh on-chain data show ETH reserves at roughly 8.7% of circulating supply last Thursday and 8.8% on Sunday—an all-time narrow corridor since the network’s 2015 inception. Since July, exchange balances have shed about 43%, even as institutional and DAT holdings accelerate. By comparison, Bitcoin reserves sit around 14.7%.

Analysts attribute the ongoing scarcity to ETH being locked in long-duration channels such as staking, restaking, Layer 2 activity, and collateral cycling, as well as long-term custody. Milk Road underscored that the market is entering a historically tight supply regime, which could support price strength as sentiment shifts. The OBV signal for ETH has flashed a divergence, hinting at hidden buying pressure that may accompany an eventual upcycle.