Ethereum Exchange Balance Turns Negative For The First Time – Why This Is Bullish For Price

[Ben Graham]

Ethereum (ETH) has just made history with a development that could reshape its market trajectory. For the first time, the Ethereum exchange balance has turned negative, meaning more tokens are being withdrawn from trading platforms than deposited. This structural shift in supply dynamics has analysts labeling it a key bullish signal for the market’s next rally. 

Ethereum Exchange Balance = Negative

Crypto market expert Cas Abbe shared a new report showing that Ethereum’s exchange flux has slipped into the negative territory for the first time on record. He suggests that the latest development could be bullish for ETH, as it signals reduced selling pressure and growing investor confidence. 

Historically, the exchange balance metric has served as one of the clearest indicators of investor behavior. When balances rise, it typically signals mounting selling pressure, as traders move coins for liquidation purposes. Conversely, when they fall, it indicates that coins are being withdrawn into private wallets, which are less likely to be sold. 

The analyst’s chart illustrates a sharp and accelerating drop in Ethereum’s exchange balances over the past few years, culminating in this historic low. Billions worth of ETH have been removed from centralized platforms, coinciding with the asset’s advance toward a target above $5,500. This indicates a clear reduction in liquid supply during already heightened demand. 

According to Abbe, the importance of this decline cannot be overstated. He noted that market tops in crypto generally occur after inflows spike back into these centralized platforms, not when balances are draining to new lows. In other words, Ethereum may not be positioned for a sell-off but for accumulation. 

As selling pressure subsides, long-term holders exert greater control over supply, creating conditions for potentially strong upward price momentum. If history is any guide, Abbe suggests that the shrinking exchange balance could set the stage for Ethereum’s next leg up.  

Analyst Sets $7,000 As ETH’s Next Target

While Ethereum’s exchange supply hits uncharted lows, technical analysts like Crypto Goos are increasingly bullish on its price. The market expert announced in a post on X that ETH has officially broken out of a long-term wedge pattern, which has constrained price action since 2021. 

The accompanying chart illustrates ETH finally piercing through resistance after years of sideways trading. Crypto Goos points to the breakout level around $3,600, and with Ethereum now trading significantly above it, the move appears confirmed. 

Although Ethereum has experienced a number of price swings in the past few weeks, Crypto Goos remains confident that it can reach a new all-time high soon. The analyst’s projection from the wedge breakout targets the $7,000 region, representing a potential upside of about 62% from current price levels above $4,300. Should momentum persist, the cryptocurrency could extend even beyond the $7,000 milestone.  

Featured image from Unsplash, chart from TradingView