The balance of Ether (ETH) held on exchanges fell to a multi-year low, with more than 31 million ETH leaving centralized exchanges in February, marking the largest monthly withdrawal since November.
While the price of ETH has remained near $2,000, derivatives data shows a split between small buyers and large sellers, raising the question of how the price might respond if demand becomes uniform across individual and whale wallets.
Ether exchange reserves signal supply squeeze
Crypto Analyst Arab Chain said that more than 31.6 million ETH left major exchanges in February, the highest monthly outflow since November. Binance leads with around 14.45 million ETH withdrawn, almost half of the total. OKX followed with around 3.83 million ETH and Kraken recorded almost 1.04 million ETH.
Sustained withdrawals reduce the pool of coins readily available for spot trading activities. Coins transferred to private wallets or staking platforms are generally less liquid in the short term. As a result, thinner currency balances can increase price volatility when market activity increases.
Likewise, CryptoQuant data also showed that Binance’s Ether reserves fell to around 3.46 million ETH, the lowest level since 2020. In previous cycles, reserves peaked above 5 million ETH before entering a gradual downtrend marked by lower highs. The latest reading continues this decline.
With ETH trading below $2,000, the contraction in exchange supply puts more emphasis on future demand. If buying pressure increases while reserves continue to fall, available liquidity on order books could further tighten around the $2,000 threshold.
Related: Ether Price Rejected Again at $2,000: How Low Can ETH Go in March?
Market remains split between retail and whales
Hyblock data highlighted divergence by transaction size. The cumulative volume delta (CVD), which tracks net aggressive buying and selling, amounts to almost $95 million for smaller trades (between $0 and $10,000). This shows continued buying pressure from retail.
In contrast, the $10,000-$100,000 trading bracket sees around -$162 million in CVD, while the $100,000 and above category sits at almost -$357 million. As observed, the largest participants shifted to net selling during the same period.
The bid-ask ratio turned slightly positive, rising to around 0.2 before dropping to 0.03, indicating slightly stronger buying interest in recent sessions. This decision follows a series of negative figures and indicates short-term stabilization rather than a general conviction.
Aggregate open interest is near $9.41 billion, down from levels near $10 billion in late February. The reduction indicates that leverage has been reduced as the price consolidates between $1,900 and $2,000.
If retail accumulation persists and large-scale sales slow, bullish positioning could align further. In this case, the exchange supply reduction could amplify price action once ETH solidifies a position above $2,000 – $2,150.
Related: AI ‘Dynamic Coding’ Could Give Ethereum Roadmap Ahead: Vitalik Buterin
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