ETH Supply Squeeze Looms: Bull Flag Targets $6,000
Ethereum’s ETH supply on exchanges has fallen to 12%, its lowest level since 2016, signaling a potential supply squeeze. Meanwhile, ETH price has surged 45% from its August low and validated a daily chart bull flag breakout above $3,770. Traders now eye a 34% upside to $6,100 if bulls overcome $4,700 resistance. However, bullish pennants have only a 54% success rate, adding caution. Institutional demand from spot Ethereum ETFs and ETH treasury companies is intensifying scarcity, while over 35.7 million ETH (30% of total) remains staked, further reducing sell-side pressure. Together, dwindling ETH supply, strong holder conviction, and a classic bull flag hint at a bullish breakout, though traders should weigh pattern reliability and market volatility.
Bullish
A plunge in ETH supply on exchanges to 12%—its lowest since 2016—combined with a validated daily bull flag suggests a classic supply-demand imbalance that often triggers breakouts. Institutional inflows from spot Ethereum ETFs and ETH treasury companies are intensifying scarcity, while 30% of ETH remains staked, all but eliminating immediate sell-side pressure. Although bullish pennants have just a 54% success rate, the convergence of dwindling exchange reserves, growing institutional demand, and solid on-chain holder conviction boosts the likelihood of a sustained upward move. In the short term, traders may see a momentum-driven push toward the $6,000–$6,150 target. Over the long term, continued ETF inflows and reduced liquid supply could reinforce bullish sentiment, potentially elevating Ethereum’s price beyond current all-time highs.