Ethereum has regained the $3,500 level after a volatile week that saw strong selling pressure and uncertainty across the crypto market. Bulls, who briefly lost control after ETH broke below a key support level, are showing new strength as liquidity spikes and sentiment begins to shift.
According to a recent CryptoQuant report, data from Binance, the world’s largest Ethereum trading platform by volume, reveals notable on-chain trends that may indicate deeper structural strength. The supply of ETH on Binance has been steadily decreasing since mid-year after peaking in June and July. By November, it had fallen to its lowest level since May of last year and is currently near the 0.0327 level.
This consistent decline in ETH available on exchanges typically reflects the movement of coins into cold storage or private wallets, suggesting investors are choosing to hold rather than sell. Historically, this action has been viewed as bullish in the medium to long term, as it reduces the amount of Ethereum available for immediate sale and reduces market pressure.
Decreasing supply on Ethereum exchanges signals market accumulation phase
In a CryptoQuant report, analyst Arab Chain highlights a significant disconnect between Ethereum price trends and exchange supply dynamics. The price of Ethereum (black line) rose consecutively to highs around $4,500-$5,000 in August and September 2025, before returning to around $3,500 today. Interestingly, this decline coincides with a sharp decline in the supply of ETH held on exchanges, suggesting that many traders withdrew their coins after locking in profits, perhaps moving them to cold storage in anticipation of long-term accumulation.
If this trend of decreasing Ethereum supply on Binance continues, market liquidity for ETH sales may become even tighter. This reduction in sell-side supply often supports price stability, as reduced availability of tokens on exchanges reduces immediate selling pressure. If the macro or on-chain environment is favorable, especially if the risk appetite of institutional and retail investors strengthens, this setup could also help fuel a new rally.
However, Arab Chain warns that continued weak demand and reduced network activity could limit short-term gains and keep prices in a flat range. Despite the short-term uncertainty, the broader on-chain situation reflects a transitional accumulation phase where long-term holders dominate flows.
This ongoing migration of ETH off exchanges, coupled with increased self-custody behavior, highlights growing investor confidence. If fundamental catalysts such as network upgrades, ETF approvals, and resumption of DeFi activity are in place, Ethereum could set the stage for the next bullish leg of the cycle.
ETH Price Analysis: Recovery of Key Support Levels
Ethereum is showing early signs of stabilization after regaining the $3,500 level, marking a slow but significant recovery from the recent capitulation phase that pushed the price near $3,200. As seen on the daily chart, ETH found temporary support at the 200-day moving average (red line). This is a historically reliable level that often defines the boundaries between bullish and bearish cycles.
The price is currently testing resistance near the $3,600-$3,700 zone, where both the 50-day moving average (blue) and 100-day moving average (green) converge. A break above this area could confirm new bullish momentum and set the stage for a move towards $3,900-$4,000, consistent with the previous range highs.
But the overall structure still reflects vigilance. Its failure to break above $4,000 earlier this month highlights the ongoing battle between buyers looking to regain control amid market uncertainty and sellers looking for profits. Trading volumes remain subdued compared to the August-September rally, suggesting that confidence among market participants has not yet been rebuilt.
Featured image from ChatGPT, chart from TradingView.com
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