Ethereum has regained the $3,500 level after a volatile week marked by heavy selling pressure and uncertainty in the crypto market. Bulls, who briefly lost control as ETH fell below key support levels, are showing renewed strength as liquidity increases and sentiment begins to shift.
According to a recent CryptoQuant report, data from Binance – the world’s largest Ethereum trading platform by volume – reveals a notable on-chain trend that could signal deeper structural strength. The supply of ETH on Binance has been in steady decline since the middle of the year, after a peak between June and July. In November, it had fallen to its lowest level since last May, now hovering around the 0.0327 level.
This steady decline in ETH available on exchanges generally reflects a migration of coins to cold storage or private wallets, suggesting that investors are choosing to hold rather than sell. Historically, this behavior has been considered bullish in the medium to long term, as it reduces the amount of Ethereum available for immediate sale and relieves market pressure.
Ethereum Exchange Supply Drop Signals Market Accumulation Phase
In the CryptoQuant report, analyst Arab Chain highlights a notable divergence between Ethereum price action and exchange supply dynamics. Ethereum price (black line) reached consecutive highs near $4,500-$5,000 in August and September 2025 before falling back to around $3,500 today. Interestingly, this drop coincided with a sharp decline in the supply of ETH held on exchanges, suggesting that many traders withdrew their coins after making a profit – likely placing them in cold storage in anticipation of longer-term accumulation.
If this downward trend in Ethereum supply on Binance persists, market liquidity for ETH sales could tighten further. Such sell-side supply contraction often promotes price stabilization, as reduced token availability on exchanges lessens immediate selling pressure. Under favorable macroeconomic or on-chain conditions, this configuration could even help catalyze a new bullish phase, especially if the risk appetite of institutional and retail investors strengthens.
However, Arab Chain warns that continued weak demand or reduced network activity could limit any near-term upside, keeping prices in a sideways range. Despite the near-term uncertainty, the broader on-chain picture reflects a transitional accumulation phase, where long-term holders dominate flows.
This continued migration of ETH off exchanges – coupled with increasing self-preservation behavior – highlights growing investor conviction. If fundamental catalysts such as network upgrades, ETF approvals, or resumption of DeFi activity align, Ethereum could set the stage for the next bullish leg of the cycle.
ETH Price Analysis: Reclaiming Key Support Levels
Ethereum is showing the first signs of stabilization after reclaiming the $3,500 level, marking a modest but significant recovery from the recent capitulation phase that sent prices surging to near $3,200. As the daily chart shows, ETH has found temporary support at the 200-day moving average (red line), a historically reliable level that often defines the boundary between bull and bear cycles.
Price is now testing resistance near the $3,600-$3,700 area, where the 50-day (blue) and 100-day moving averages (green) converge. A break above this zone could confirm renewed bullish momentum, potentially paving the way for a move towards $3,900 to $4,000, aligning with the range’s previous highs.
However, the overall structure still shows caution. The failure to keep the price above $4,000 earlier this month highlights the ongoing battle between buyers trying to regain control and sellers taking profits amid market uncertainty. Trading volume remains subdued compared to the August-September recovery, suggesting that market participants’ conviction is still rebuilding.
Featured image from ChatGPT, chart from TradingView.com
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