- Ether price has hit new highs recently due to declining exchange supply from investors withdrawing to self-custody wallets and increased accumulation by large wallet holders.
- The amount of Ether being staked on the Beacon Chain has risen to over $31 billion worth, locking up 26% of the total supply.
- Ethereum futures open interest broke $8 billion recently and has jumped 50% in two weeks, reflecting surging demand for leveraged exposure ahead of potential catalysts.
Ether (ETH) hit a new high this week, fueled by strong fundamentals and technicals. The second largest cryptocurrency continues to gain strength while Bitcoin sells off.
Reduced Supply on Exchanges
One factor driving Ether’s upside is the declining supply on exchanges. According to Glassnode, ETH balances on exchanges reached a 20-month low after dropping 7.7% over the last 90 days.
Total inflows and outflows show a steep decline since October 2023, when withdrawals surged. This drop comes alongside a 130% increase in Ether’s price over the same period.
The decreasing supply on exchanges suggests investors are withdrawing to self-custody wallets, signaling they don’t intend to sell in anticipation of higher prices.
Large Holders Accumulating
The declining exchange supply is explained by increased accumulation among large holders in recent weeks. Glassnode data shows the number of wallets holding $100K or more of ETH has risen since early February.
The number of these large wallets grew from 94,620 on Jan 1 to 141,406 on March 4. This suggests whales are not selling into the rally but continue accumulating, positioning for further gains.
Ethereum Staking on the Rise
Also reducing available supply is the growing amount of Ether being staked on the Beacon Chain. According to Dune Analytics, over $31.58 billion worth of ETH is now staked on Ethereum’s PoS protocol.
This means 26.3% of the supply is locked in staking, with over 987,000 validators involved. Solutions like Lido and Rocket Pool are making staking more accessible.
Ethereum Futures Demand Increasing
Rising leverage demand has also pushed ETH futures open interest (OI) close to its $13 billion peak from November 2021. According to Coinglass, OI broke above $8 billion on February 12 after remaining below that level for over two years. It has since jumped nearly 50% in under two weeks, pointing to surging demand for leveraged exposure.
Ethereum’s on-chain and derivatives activity reflects a bullish outlook ahead of a potential spot ETF approval and the upcoming Dencun upgrade.
