Ethereum supply hits 2017 lows – THESE 2 metrics suggest demand squeeze

Ethereum’s exchange supply has steadily decreased as holders show limited willingness to sell, signaling a broader preference for long-term positioning rather than short-term liquidation.

This shift comes one month and eight days after the Ethereum Foundation officially concluded all token unlocks, following the sale of $1.96 million worth of Ethereum [ETH] into the market, according to DeFiLlama.

Combined with evolving investor behavior, this supply-side dynamic points to a developing long-term outlook for Ethereum at the time of writing.

Although ETH has shown little immediate price reaction—remaining muted and trading 5.47% below its recent daily high—the underlying data offers insight into the asset’s potential medium- to long-term trajectory.

Staked ETH reaches a new all-time high

The clearest confirmation of Ethereum’s shrinking tradable supply comes from the continued rise in Total Value Staked.

This metric reflected ETH locked in deposit smart contracts and, therefore, unavailable for active trading on exchanges.

Data from CryptoQuant showed that the amount of ETH deposited into staking contracts has reached a new all-time high of 37.25 million ETH, valued at roughly $73.35 billion. These tokens are effectively removed from short-term market circulation.

On a month-to-date basis—from the 1st of February to the present—more than 410,000 ETH has been added to staking contracts, representing approximately $808 million at current prices.

If this pattern holds, staking levels could scale further in the coming weeks.

The market implication of shrinking and less-accessible capital is straightforward—when demand eventually rises, reduced liquidity can amplify price movement as each available unit becomes more expensive.

For now, ETH demand remains relatively subdued, with prices trading below the $2,000 threshold.

As a result, the supply contraction is more likely to influence price dynamics over the medium to long term, particularly once demand strengthens and broader sentiment turns bullish.

Additional supply-side confluence

Staking growth is not the only indicator pointing to reduced market supply. Investor behavior on exchanges also reflects a clear preference for holding rather than selling.

The number of Ethereum Deposit Addresses sending funds to exchanges has dropped sharply.

Typically, a decline in Exchange Deposits suggests investors are choosing to hold or move assets to cold storage, rather than positioning them for sale.

CryptoQuant data showed that ETH deposit addresses have fallen to roughly 4,000—a level last seen in 2017. While that period coincided with rising prices, current market conditions differ, and the metric should be interpreted within today’s broader context.

At the same time, Ethereum’s Exchange Reserves have declined. A falling exchange reserve indicated a reduced quantity of ETH readily available for public market sell-offs.

At press time, ETH held on exchanges stands between 16.18 million and 16.19 million ETH, marking the first decline since reserves began rising on the 11th of February. This drop suggested investors are actively withdrawing assets from exchanges rather than preparing to sell.

Demand remains the missing variable

While supply contraction is increasingly evident, demand remains the critical counterbalance. The most direct measure of this comes from Spot market activity on centralized exchanges.

Day-to-day net buying pressure has weakened. On the 1st of February, Spot investors accumulated approximately $412 million worth of ETH. This figure steadily declined, reaching just $56.81 million by the 12th of February.

The 15th of February, however, stood out as an exception. On that day, Spot purchases surged to roughly $473.84 million, marking the largest single-day inflow during the period.

Sustained growth in daily net inflows—rather than isolated spikes—would signal stronger demand and provide a more constructive backdrop for price appreciation.

For now, buyers have absorbed selling pressure reasonably well, but a more consistent and sustained inflow will be necessary to meaningfully shift momentum and support a stronger price trend.

Final Summary

• Ethereum [ETH] staking hit a record 37.25M ETH, while Exchange Reserves fell near 16.18M ETH.
• Spot demand remains uneven. After $412M in net inflows on 1 February, flows fell to $56.81M by 12 February, with one spike to $473.84M on 15 February.