ETH Liquidity Dries Up; Is a Supply Shock Brewing for Ethereum?

• Ethereum’s supply on Binance has hit its lowest level in over a year, signaling a potential supply shock.
• This “exchange outflow” trend is driven by institutional and whale accumulation, with BitMine’s treasury hitting $12.5B.
• On-chain data shows a divergence: whales (10k-100k ETH) have increased holdings 52% since April, while retail has been selling.

Ethereum’s supply on exchanges has hit its lowest level in more than a year. This indicates that traders are moving their holdings off centralized platforms. CryptoQuant insights reveal the amount of ETH held on Binance, the world’s largest Ethereum exchange by volume, has been in a steady decline since mid-2025.

ETH Supply Shock Gathers as Exchange Reserves Hit 1-Year Low

After peaking in June and July, supply levels dropped sharply through November, reaching their lowest point since May of the previous year.

The steady outflow of ETH from exchanges typically signals a transition toward long-term accumulation, as traders transfer assets into cold wallets or custody solutions, reducing the amount available for sale.

Historically, this pattern has preceded medium- to long-term bullish phases. At the same time, Ethereum’s price has cooled from its August–September highs near $4,500–$5,000 to around $3,500, suggesting that many investors have taken profits and are now holding in anticipation of future gains.

Related: 4,920 ETH Worth $16.25M Pulled From Tornado Cash As Ethereum Falls 13% This Week

BitMine’s $12.5B Ethereum Treasury Signals Institutional Accumulation

BitMine Immersion Technologies announced the purchase of 110,288 ETH this week, a 34% increase in accumulation compared to the previous week, bringing its total holdings to 3.5 million ETH, worth approximately $12.5 billion. The company’s average purchase price stands at $3,639 per token.

BitMine’s chairman Tom Lee emphasized that the recent dip provided an attractive accumulation opportunity and reflected Wall Street’s growing enthusiasm for tokenized assets.

The firm now controls about 2.9% of the total ETH supply and aims to reach 5% ownership, positioning itself as the largest Ethereum treasury company. Lee described Ethereum’s growth trajectory as part of a “super cycle story,” supported by financial institutions exploring onchain transparency and asset tokenization.

Whale Accumulation Points to Early-Stage Reversal

According to CryptoQuant, large holders controlling between 10,000 and 100,000 ETH have increased their collective balances by 7.6 million ETH since late April, a 52% surge in holdings. 

Also, smaller retail addresses holding between 100 and 1,000 ETH have reduced their exposure by about 16%, indicating that while retail remains cautious, whales are taking advantage of the recent pullback.

Ethereum’s ETH/BTC ratio has stabilized near multi-month lows with daily transactions up 25% from September, while the discount on staked ETH has normalized following the $19 billion market correction in October, noted CryptoQuant.

Fundamentals and Upgrades Align

The upcoming Fusaka upgrade, scheduled for mainnet activation on December 3, will introduce significant scalability and efficiency improvements, including Peer Data Availability Sampling and new data lanes for rollups.

These changes are expected to cut transaction costs, enhance Layer-2 throughput, and allow greater participation in network validation, as ETH sets up the stage for a recovery in late 2025.

Related: Solana vs Ethereum: Analyst Says SOL Is ‘Winning’