PelinayPA2025-09-23

Ethereum Exchange Supply Ratio (ESR) at Historic Lows: Supply Shock Scenario for Price

Looking at past price movements helps to understand the current situation. From 2016 to 2020, ESR was on an upward trend, meaning a growing share of ETH was held on exchanges. Investors were in a position to sell, and despite price increases, the constant rise in ESR created selling pressure. During the 2020–2021 bull market, ESR peaked around 0.30. Exchange liquidity was very high, and while the price experienced strong rallies, elevated ESR near market tops consistently signaled selling pressure. Since 2022, ESR has entered a sharp downtrend, steadily falling to the current level of 0.139. This indicates that a decreasing share of ETH is kept on exchanges, showing that investors are moving coins into personal wallets and reducing selling intentions. In 2024–2025, ESR’s steep decline highlights extremely low liquidity on exchanges. Such conditions often lead to a supply shock: with weaker selling pressure, any increase in demand can trigger rapid price acceleration. Currently, Ethereum trades around $4,100, and this low ESR is a positive sign for potential new highs. Today, selling pressure in Ethereum has dropped to minimal levels, suggesting the price may aim for fresh peaks above $4,100. Note: A falling ESR typically has a bullish impact, as fewer coins are available for sale on exchanges. Rising demand under such conditions can drive the price upward. Conversely, a rising ESR is bearish, as more ETH on exchanges signals stronger selling pressure.