The amount of Ethereum on exchanges has fallen to its lowest point since November 2015, with only 8.97 million ETH now available.
As per a March 21 analysis, this reduction is primarily attributed to the escalating interest in decentralized finance and staking. The pressure to sell has diminished as more holders choose to secure their assets rather than leave them on exchanges. Over the past seven weeks, Ethereum’s (ETH) supply on exchanges has plummeted by 16.4%, reflecting a long-term trend of accumulation.
Despite this tightened supply, Ethereum’s price has not experienced a corresponding increase—at least not yet. ETH has dropped 47% from its December peak of $4,105 to a March 21 value of $1,990, making it one of the least-performing major cryptocurrencies.
On-chain and technical indicators point toward further price declines. Analysts from Standard Chartered have recently revised their ETH price forecast for year-end down from $10,000 to $4,000, attributing this adjustment to rising competition from other networks, particularly Ethereum layer-2 solutions.
Layer-2 networks are enticing more users by offering lower fees, which is leading to a decrease in mainnet activity. According to DeFiLlama, Ethereum-based DEX protocols processed a volume of $9.8 billion last week, with Arbitrum (ARB) and Base accounting for $5.67 billion of that total.
The monthly DEX volume on Ethereum has seen a decline from $92 billion in December to $82 billion in February, with even lower figures anticipated for March. This reduction in mainnet activity has adversely affected Ethereum’s fee revenue, an essential aspect of its economic structure—dropping from $218 million in December to merely $46 million in February.
While transactions have become less expensive thanks to the Dencun upgrade, which slashed gas fees by 95%, Ethereum’s revenue continues to trend downward. Additionally, the total value locked in Ethereum has decreased from $76 billion in December to $46 billion at the time of writing.
A possible lifeline for Ethereum may come through the staking of exchange-traded funds. Both the New York Stock Exchange and Chicago Board Options Exchange have filed requests with the U.S. Securities and Exchange Commission to allow staking in Ethereum ETFs. With Ethereum Spot ETFs witnessing $370 million in outflows over the past month, institutional interest remains sluggish.
From a technical standpoint, Ethereum’s value continues to falter and is currently met with resistance at $2,042. The 50-day moving average is acting as a hurdle, with Bollinger Bands indicating low volatility, hinting at possible consolidation.
While ETH is recovering from oversold conditions, it shows a lack of significant momentum, with the RSI standing at 41.22. Although the low trading volume suggests uncertainty among traders, a small increase points to some accumulation.
If ETH manages to surpass $2,042, the next price targets will be $2,163 and $2,370. Conversely, if the support at $1,986 fails, a drop towards $1,714—where prior buying interest has been noted—could occur.