Ethereum (ETH) is entering a phase that analysts say resembles the early stages of its strongest market cycles, driven by institutional accumulation, dwindling exchange supply, and new proposals aimed at stabilizing the network’s economy.
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As large investors expand their presence and sponsors explore changes that could make trading fees more predictable, sentiment on Wall Street has shifted sharply recently. For many, the combination of tighter supply and improving fundamentals has created conditions that could support a significant price revision.
ETH's price records some gains on the daily chart. Source: ETHUSD on Tradingview
Foreign exchange supply tightens as institutions accelerate accumulation
Ethereum held on centralized exchanges fell to its lowest level since the network’s launch in 2015. Data from Glassnode shows balances fell to 8.7% of total supply last week, a 43% drop since July.
The reduction is related to staking, layer 2 migration, institutional custody, and long-term treasury allocations, destinations that rarely return tokens to exchanges.
BitMine Immersion Technologies, now the largest holding company in Ether, expanded its position by another $199 million over the weekend. The company controls $11.3 billion worth of ETH, representing about 3.08% of the supply, and continues to buy to reach its 5% target.
ETFs also contributed to the decline, with cumulative inflows now above $12 billion. Analysts note that nearly 40% of all ETH is locked in staking or institutional products, creating one of the tightest supply environments the asset has seen.
Technical analysts point to hidden signs of accumulation. Recent libra volume figures have broken out above resistance, although price remains near $3,050, a divergence that some interpret as an indication of buying pressure.
Fee reform advances as Vitalik Buterin proposes gas futures market
Along with market activity, a new economic proposal from Vitalik Buterin is attracting attention. The Ethereum co-founder presented a system for on-chain gas futures that would allow users to lock in transaction fees for future periods.
The mechanism resembles traditional futures markets and is designed to help traders and developers hedge against sudden increases in network demand.
Buterin says clearer forward pricing could support businesses that rely on predictable costs, particularly as activity grows in staking, tokenization and decentralized applications. Although it is still in its early stages, the idea is seen as part of a larger effort to make Ethereum more stable as it evolves.
Analysts see conditions forming for broader cycle
Market commentators are increasingly citing a combination of decreasing supply, growing institutional involvement, and improving network efficiency as reasons why Ethereum could outperform during the next major cycle.
Some compare the current dynamic to that of Bitcoin eight years ago, noting that Ethereum’s evolving business model and growing role in tokenized finance give it a broader set of drivers than in previous cycles.
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It remains unclear whether these developments will immediately translate into price increases. But with exchange balances at record highs and institutions accumulating steadily, analysts agree that Ethereum is entering a structurally different phase, defined less by speculation than by sustained demand.
Cover image from ChatGPT, ETHUSD chart from Tradingview
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