$ETH Binance’s Ethereum Reserves Drop By Nearly 300,000 ETH In A Month – Is A Massive Rally Coming?

Although Ethereum (ETH) is still trading nearly 50% below its all-time high (ATH) of $4,878, signs are emerging that the second-largest cryptocurrency by market capitalization may soon experience a “supply shock” due to dwindling reserves on major cryptocurrency exchanges like Binance.

Binance Ethereum Reserves See Massive Fall

According to a recent CryptoQuant Quicktake post by on-chain analyst Amr Taha, ETH reserves on Binance have been steadily falling since April 14. Taha noted that the exchange’s ETH reserves declined from slightly less than 4.2 million to 3.9 million by May 14 – a drop of around 300,000 ETH in just one month.

Taha proposed two possible reasons behind the drop in Binance’s ETH reserves. First, he suggested that investors may be transferring ETH to cold wallets or deploying it in decentralized finance (DeFi) protocols for security or yield generation.

Second, institutional investors may be withdrawing large amounts of ETH for purposes such as over-the-counter (OTC) deals, private investments, or staking. These activities reduce exchange reserves without necessarily creating selling pressure. Taha concluded: