Ethereum continues to recover, gaining about 15.3% in the past two weeks and currently trading above $1,800. Despite investor concerns and a decline in public enthusiasm, ETH appears to be showing resilience.
The asset’s latest moves reflect renewed buying interest, and several on-chain indicators also point to possible bullish momentum ahead. One such indicator is related to the supply of ETH on exchanges.
Falling exchange supply suggests weakening selling pressure
Recent analysis by Amr Taha, a contributor to CryptoQuant’s QuickTake platform, noted a significant drop in the Ethereum trading supply ratio on Binance — a metric that tracks the amount of ETH held on the platform relative to its circulating supply.
According to Taha, the ratio is now at its lowest point in weeks, suggesting that more ETH is being withdrawn from Binance, potentially moving into cold storage or decentralized finance (DeFi) protocols.
Taha explained that a decline in the exchange-to-supply ratio has historically indicated less sell-side pressure, as users typically withdraw assets when they plan to hold or deploy them into alternative protocols rather than sell them.
The change was particularly noticeable on Binance, which remains the largest cryptocurrency exchange by volume and liquidity. As such, changes in its ETH reserves can often reflect shifts in broader market sentiment.
To illustrate this trend, Taha pointed to a similar case in April, when the trading supply of ETH on Binance dropped dramatically, and the price subsequently rose from below $1,700 to around $1,950, a 14% increase in a few days.
Analysts believe the current model could set the stage for similar developments, especially given the state of the derivatives market.
Ethereum short squeeze setup appears around $1,900-2,000
A heat map tracking liquidations shows a growing concentration of short positions between $1,900 and $2,000. Taha said this aggressive short interest forms a potential area for price gains if those positions are forced to close in a short squeeze.
In particular, if ETH climbs into this range, the resulting liquidations could amplify upward momentum. In this case, as the available supply on exchanges continues to decline, the cost of driving ETH prices higher will also decrease.
Taha noted that the combination of falling forex balances and rising short interest created favorable conditions for so-called “liquidity hunt” — situations where prices are pushed higher to trigger liquidations and profit on trapped positions.
As ETH’s current price momentum and seller resistance decrease, the $1,900 to $2,000 range is increasingly coming into focus.
