ETH Supply Ratio Drops Below 0.037 on Binance, Bullish Signal
Ethereum supply ratio on Binance fell sharply from 0.041 to 0.037 between August 16 and September 3, suggesting a looming supply crunch. Despite this, ETH’s price remained stable in the mid-$4,000 range, highlighting strong demand and growing holder confidence. The CryptoQuant data show accelerated outflows as investors move assets into cold wallets, reducing exchange supply.
Historically, declines in the Ethereum supply ratio have preceded significant rallies, as lower liquidity constrains sellers. Coupled with healthy ETF inflows, neutral futures funding rates, reduced leverage, and subdued whale selling, the setup points to a potential institutional investor-led bull cycle. On-chain metrics also look supportive: 36 million ETH staked and 12-month highs in daily transactions underscore improving network fundamentals.
Bullish
A falling Ethereum supply ratio historically precedes upward price moves by limiting on-exchange liquidity and constraining seller pressure. The recent drop below 0.037 on Binance, paired with stable mid-$4,000 pricing, indicates strong demand and accumulation in cold wallets. Healthy ETF inflows, neutral futures funding rates, lower leverage, and minimal whale selling further support a bullish outlook. Similar patterns in past cycles saw outflows and reduced liquidity trigger sustained rallies. Short-term, tight supply may fuel a price breakout; long-term, continued institutional participation and improving network fundamentals—36 million ETH staked and rising daily transactions—could drive a new bull market.