Ethereum Faces Intense Supply Shock as Price Surges 50%

Over 1M ETH left exchanges in 30 days, triggering a 50% price surge as investor demand rises and sell pressure drops sharply.

Ethereum's sharp outflows mirror past bull runs, indicating strong holding behavior and a potential setup for continued upside momentum.

Despite bullish signals like MACD crossover, market shows tension with overbought RSI and active profit-taking by cautious traders.

Ethereum is experiencing a powerful supply shock as over 1 million ETH exited exchanges within 30 days, slashing sell-side liquidity. This marks a 5.5% drop in exchange-held ETH, reducing available supply to just over 17 million coins. This is the sharpest outflow since the 2021 bull cycle.

Meanwhile, Ethereum's price has surged from $1,800 to nearly $2,700—a 50% increase that signals rising demand amid vanishing supply. The synchronized drop in exchange supply and climbing price confirms the classic breakout setup: smart money accumulating, retail catching up, and a market primed for volatility.

Exchange Outflows Signal Long-Term Holding Trend

Besides the raw numbers, the trend carries strong bullish implications. Ethereum supply began falling gradually in late March, briefly stabilizing in early April. However, mid-April marked a pivot, with supply falling below 17.6 million ETH. From May 5 onward, outflows accelerated rapidly, draining over 400,000 ETH in under two weeks. Consequently, this reduction slashed potential sell pressure, pushing prices upward.

Source: CryptoBusy

Moreover, historical patterns suggest this setup often precedes explosive rallies. Reduced exchange supply typically means increased investor confidence and long-term holding. This trend mirrors past cycles where ETH rallied sharply after sustained outflows.

Bullish Indicators Clash With Short-Term Uncertainty

However, short-term price action tells a mixed story. ETH is currently bouncing between $2,500 support and $2,625 resistance. The MACD shows a fresh bullish crossover, supporting further upside. Additionally, investor interest in Ethereum’s utility and restaking is fueling long-term accumulation.

On the flip side, the RSI flashes overbought warnings, indicating a potential cooldown. Moreover, the presence of large short positions suggests active profit-taking. This friction reveals a coiled market, caught between bullish conviction and cautious sentiment.

Hence, if the supply shock persists or sentiment flips, Ethereum could enter rapid price discovery territory. Otherwise, expect continued choppiness as traders and whales reposition.

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