Ethereum has recovered to the $3,500 level after a volatile week marred by extreme selling pressure and uncertainty across cryptocurrency markets. Bulls, who briefly lost control as ETH fell below key support, are showing renewed strength as liquidity surges and sentiment begins to shift.
According to a recent CryptoQuant report, data from Binance, the world’s largest Ethereum trading platform, shows notable on-chain trends that could indicate deeper structural strengths. ETH supply on Binance peaked between June and July and has been steadily declining since mid-year. In November, it fell to the lowest level since last May and currently remains at the level of 0.0327.
The continued decline in ETH available on exchanges typically reflects coins moving into cold storage or private wallets, suggesting investors are choosing to hold rather than sell. Historically, this action was considered optimistic in the medium to long term as it reduces the amount of Ethereum available for immediate sale and eases market pressure.
Ethereum exchange supply decrease signal market accumulation stage
In a CryptoQuant report, analyst Arab Chain highlights notable differences between Ethereum’s price action and exchange supply dynamics. Ethereum price (black line) rose to consecutive highs around $4,500-$5,000 in August and September 2025, before recovering to its current price of around $3,500. Interestingly, this decline coincided with a sharp decline in the supply of ETH held on exchanges, suggesting that many traders withdrew their coins after locking in their profits. This is likely to result in coins being refrigerated in anticipation of long-term accumulation.
If the trend of decreasing Ethereum supply on Binance continues, market liquidity for ETH sales may become stronger. This reduction in sell-side supply often supports price stabilization. This is because as token availability decreases on exchanges, immediate selling pressure decreases. Under favorable macro or on-chain conditions, this setup could also help fuel a new bullish phase, especially if the risk appetite of institutional and retail investors strengthens.
However, Arab Chain warns that continued weakness in demand or reduced network activity could cap any short-term upside and keep prices sideways. Despite near-term uncertainty, the broader on-chain picture reflects a transitional accumulation phase with long-term holders dominating the flow.
These ongoing ETH off-exchange transfers highlight the growing confidence of investors along with the rise in self-storage behavior. If fundamental catalysts such as network upgrades, ETF approvals, or a resumption of DeFi activity align, Ethereum could set the stage for the next bull cycle.
ETH Price Analysis: Key Support Level Recovered
Ethereum is showing early signs of stabilization after regaining the $3,500 level, representing a modest but significant recovery from the recent capitulation phase that drove the price near $3,200. As seen on the daily chart, ETH has found temporary support at the 200-day moving average (red line), a historically reliable level that defines the boundary between bullish and bearish cycles.
The price is currently testing resistance near the $3,600-$3,700 area where both the 50-day moving average (blue) and the 100-day moving average (green) converge. A break above this area could confirm new bullish momentum and potentially set the stage for a move towards $3,900-$4,000, in line with previous range highs.
However, the overall structure still reflects caution. The failure to stay above $4,000 earlier this month highlights the ongoing battle between buyers seeking to regain control and sellers taking profits amid market uncertainty. Trading volumes remain low compared to the August-September rally, suggesting that confidence among market participants is still recovering.
Featured image from ChatGPT, chart from TradingView.com
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