Crypto

Ethereum Sharp Exchange Outflows Trigger Historic Supply Squeeze: Here’s the Impact

Ethereum’s Remarkable Comeback: A Bullish Surge Above $4,300

In a remarkable turnaround, Ethereum has surged past the $4,300 threshold, marking a significant recovery as positive sentiment returns to the cryptocurrency sector. Concurrently, there has been a substantial withdrawal of ETH from centralized exchanges, signifying a pivotal moment for this leading altcoin during the current bullish market phase.

Imminent Supply Shortage Predicted for Ethereum

The rapid price recovery of Ethereum has led to heightened bullish sentiment and increased investor activity on cryptocurrency platforms. Alphractal, a sophisticated investment and on-chain analytics tool, has reported an unprecedented shift in Ethereum’s supply dynamics, as massive quantities of ETH are being rapidly withdrawn from centralized exchanges.

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This persistent outflow of Ethereum from exchanges has created a historic supply shortage. For the first time, the volume of ETH leaving exchanges is surpassing the rate at which it can be accumulated. This record-breaking supply constraint underscores a growing trend among investors to prioritize long-term holding and staking over frequent trading, resulting in reduced market liquidity.

Data from recent months indicates that billions of dollars in ETH have been pulled from exchanges, both in terms of ETH volume and USD value. Despite these significant withdrawals, Alphractal highlights the importance of the Exchange Flux Balance, a crucial metric that measures the overall net flow on exchanges.

Elevated values in this metric suggest that inflows are exceeding outflows, leading to increased reserves on exchanges. Conversely, low or negative values indicate that exchanges are struggling to accumulate sufficient ETH, thereby contributing to the supply squeeze. Currently, this metric has turned negative for the first time, reflecting robust institutional and public demand for Ethereum. This surge in interest could soon ignite further market activity.

Ethereum Closes Q3 on a Strong Bullish Trend

As the fourth quarter of 2025 begins, speculation abounds regarding whether this period will mirror the bullish sentiment of the recently concluded third quarter. Insights from the leading crypto analytics platform, CryptoRank, reveal that Ethereum enjoyed a highly positive Q3, with a notable 66.7% increase in its price.

The third quarter of 2025 emerged as a breakthrough period for Ethereum, as it surpassed its previous all-time high and demonstrated significant upward momentum. A key driver of this surge was the favorable legislative environment in the US, which propelled stablecoins and decentralized finance (DeFi) into the mainstream.

Ethereum, serving as the foundational layer for both stablecoins and DeFi, has been a primary beneficiary of this regulatory shift. Given Ethereum’s historical bullish performance in Q4 over the last decade, there is potential for this quarter to conclude on another positive note.

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Emma Horvath

After graduating Communication and Media Studies MA in Eötvös Loránd University, Emma started to realize that her childhood dream as a creative news reporter committed to find dynamic journalism stories. I'm a passionate journalist with a keen interest in the fast-evolving world of cryptocurrencies. I've been reporting on the latest developments in the crypto industry for several years now, covering breaking news and providing insights on how the market is trending. I'm adept at analyzing daily market movements, researching ICOs, and keeping track of the latest innovations in blockchain technology. My expertise in the space makes her a trusted voice in the crypto community. Whether it's the latest Bitcoin price movements or the launch of a new DeFi platform, I am always at the forefront, bringing her readers the most up-to-date and informative news.

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