Is Ethereum About to Break Out? Binance Supply Plummets While Prices Stay Strong

Data from Binance, the largest Ethereum reserve holder among exchanges, revealed that ETH supply on the platform declined while prices remained remarkably stable.

Between the second half of August and September 3, the Exchange Supply Ratio (ESR), which measures the proportion of ETH held on exchanges relative to total supply, fell sharply from 0.041 to below 0.037. This represents the largest drop observed in the period, occurring within just two weeks.

Despite this, Ethereum’s price held near local highs of approximately $4,400 and showed no sharp correction.

Ethereum Exodus

CryptoQuant analyst interprets this combination as a signal that investors are increasingly withdrawing ETH from Binance and instead favoring self-custody over exchange storage. The behavior points to growing market confidence and a potential reduction in readily available sellable supply, even as overall demand remains strong.

Historically, declining ESR coupled with price consolidation has led to upward price movements, as reduced exchange liquidity limits the ability of sellers to exert downward pressure. Current ESR levels have returned to figures last seen before June, which implies that previous profit-taking has largely been absorbed and that ETH is being reaccumulated into long-term wallets.

Market conditions further validate this bullish narrative. For instance, a decrease in leverage indicates less speculative pressure, stable funding rates suggest neutral sentiment in perpetual futures markets, and subdued activity from on-chain whales means that long-term holders are largely refraining from selling.

These factors indicate the beginning of a new bull phase, potentially driven by institutional participation rather than short-term speculation.

At the same time, on-chain analytics platform Lookonchain pointed to an aggressive wave of Ethereum accumulation by whales and institutions. In just the past two days, large players purchased a total of 218,750 ETH worth approximately $942.8 million.

Among the most notable buyers, Tom Lee’s Bitmine snapped up 69,603 ETH, equivalent to $300 million, sourcing the tokens directly from BitGo and Galaxy Digital. Meanwhile, five newly created wallets collectively acquired 102,455 ETH, roughly $441.6 million, from trading firm FalconX.

Ethereum Whales Return

As Ethereum eyes reclaiming $4,500, the altcoin has found strong backers in whales and sharks who have quietly built their positions this year. Santiment’s data shows wallets holding 1,000-100,000 ETH upped their reserves by 14% in five months, a buying streak that began at the $1,400-$1,800 range.

Altcoin Vector’s analysis further highlighted that between July and August, mega whales with 10,000+ ETH, alongside whales in the 1,000-10,000 cohort, added aggressively during ETH’s latest upward impulse. Analysts suggest this accumulation has been key in easing bearish pressures and supporting the asset’s rebound after last month’s choppy action near record highs.