Ethereum Holds Above $3,100 Amid Looming Supply Squeeze and Gas Futures Proposal
Ethereum (ETH) is trading above $3,100, up 2.2% in the last 24 hours. As the second-largest cryptocurrency by market capitalization, it is
Quick overview
- Ethereum is currently trading above $3,100, reflecting a 2.2% increase in the last 24 hours.
- The supply of ETH on centralized exchanges has dropped to 8.8%, the lowest since 2015, indicating a potential supply squeeze.
- Technical indicators show positive momentum, with significant buying strength suggesting possible price increases ahead.
- Vitalik Buterin's proposal for a gas futures market aims to address transaction fee volatility, enhancing market stability.
Ethereum ETH/USD is trading above $3,100, up 2.2% in the last 24 hours. As the second-largest cryptocurrency by market capitalization, it is showing renewed momentum thanks to a combination of positive technical and fundamental factors.
The recent price swings come at a time when Ether exchange balances are at their lowest level since the network started in 2015. Only 8.8% of the total ETH supply is presently held on centralized exchanges. This is a huge drop of 43% since early July, which analysts say has caused an unusual supply squeeze that could lead to big price increases.
ETH Supply Dynamics Point to Potential Price Surge
According to Glassnode, Ether’s exchange balance of 8.7% last Thursday was the lowest it has ever been, making it the most limited supply environment in the asset’s existence. In comparison, Bitcoin has a greater exchange balance of 14.7%, which means that there is more selling pressure on BTC.
Milk Road, a macro research platform, said that ETH is being systematically absorbed into places where it can’t be sold, such as staking protocols, restaking platforms, layer-2 networks, digital asset treasuries, collateral loops, and long-term custody solutions. “While the market decides what to do next, the supply of ETH is getting tighter in the background.” “Price follows when that gap closes,” the research stream said.
The supply shortage happened at the same time as more institutions buying up assets, especially through digital asset treasury purchases that sped up in the middle of 2025. This change in the way tokens are distributed makes the amount available for spot trading smaller, which could make prices more volatile as demand rises.
ETH/USD Technical Analysis Reveals Hidden Buying Strength
Technical indicators are showing positive signs in addition to basic supply and demand factors. On Friday, analyst Sykodelic found an important On-Balance Volume (OBV) breakout above resistance, even if the price briefly dropped back down to that level. This difference between volume momentum and price movement usually means that smart buyers are building up their positions, and it generally happens before big price jumps.
“This is a sign of buying strength, and usually the price will follow,” Sykodelic said. He also said that the entire price action structure seems optimistic, which means that new highs might happen before any real correction happens.
Ether has stayed above the critical $3,000 mark for five days in a row, but resistance at $3,200 has been hard to break through. Last week, the ETH/BTC trading pair also broke above its downtrend line, which means that it is getting stronger compared to Bitcoin.
Buterin’s Gas Futures Proposal Addresses Fee Volatility Concerns
Vitalik Buterin, one of Ethereum’s co-founders, has come up with a new on-chain gas futures market to help ease worries about transaction fee volatility. This is a positive step for Ethereum. The plan would let people lock in gas prices for certain periods of time in the future, like how regular commodities futures markets work.
“People would get a clear signal of what people expect gas prices to be in the future, and they would even be able to protect themselves against future gas prices,” Buterin wrote on Saturday. A market like this would give traders, developers, applications, and institutions that need to know their operational costs ahead of time a lot of peace of mind.
The suggestion comes at a time when Ethereum gas fees have dropped a lot. Basic transactions now cost only $0.01, and the average charge for all sorts of transactions is $0.30, down from $1.00 at the start of 2025.
Ethereum Price Outlook: Breaking $3,200 Resistance Key to Further Gains
Ethereum looks like it will stay strong since the fundamentals of supply are getting tighter and the technical momentum is rising. The first thing that has to happen is for the price to break past the $3,200 resistance level. This would likely lead to testing the $3,500 level and maybe even higher levels.
Record-low exchange balances, institutional accumulation, optimistic volume indications, and better network economics all point to continued upward pressure. Traders should, however, keep an eye on the overall state of the cryptocurrency market and any major economic changes that could affect prices in the near future.
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