Shrinking Binance ETH Supply Signals Potential Rally
Ethereum price is holding around $4,330 after peaking near $4,946 in late August. On-chain data from CryptoQuant indicates Binance’s Ethereum Exchange Supply Ratio dropped from 0.041 to 0.037 within two weeks, pointing to reduced sell pressure as investors move ETH into self-custody. This decline occurred without significant price corrections, suggesting growing market confidence. Technically, Ethereum shows consolidation with narrow Bollinger Bands, neutral RSI at 51, and mixed MACD readings. Key resistance lies at $4,480 and support at $4,240. If bulls push through resistance, a rally toward $4,600 could follow; conversely, a drop below $4,240 may trigger a deeper correction toward $4,050. Traders should watch Binance balances and on-chain metrics for clues to the next directional move.
Bullish
The sharp drop in Binance’s ETH supply ratio historically reduces sell-side liquidity and often precedes price rallies. Investors moving Ether off exchange signals confidence and a shift toward accumulation. Technically, low volatility and neutral momentum indicators set the stage for a breakout. Similar on-chain trends in early 2021 led to sustained upward moves. In the short term, breaching $4,480 resistance could trigger rapid gains toward $4,600. Over the long term, continued off-exchange accumulation may underpin a higher floor, fostering a bullish market structure.