Ethereum Price Dips to $3,556 Amid Historic Exchange Outflows

Ethereum Price Dips to $3,556 Amid Historic Exchange Outflows

Supply on exchanges slumps to nine-year low, fueling accumulation around $3,550 support and setting the stage for a bullish breakout | That's TradingNEWS

TradingNEWS Archive 8/7/2025 6:21:47 PM
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Ethereum Price Retreat Below Three Thousand Six Hundred

ETH–USD slipped under the $3,600 threshold Wednesday as traders rotated capital into emerging presale tokens. On-chain data indicates more than $42 million of ETH left centralized exchanges in the past 24 hours, pushing the total exchange balance down to 15.35 million ETH—the lowest level since 2016. That reduction in readily available supply suggests longer holding periods among whales and institutions, heightening the potential for sharp price moves when fresh demand arrives. Despite this outflow, spot liquidity has proven shallow, leaving the token vulnerable to swings if confidence falters around key support levels.

Scarcity Signal From Exchange Outflows And Accumulation Clusters

Metrics from Glassnode reveal a dramatic 14.7 percent drop in exchange-held ETH over the past four months. As the on-exchange supply contracts, major buy walls have emerged in the $3,550–$3,630 zone, where roughly 7 million ETH sits in addresses acquired at those prices. That cluster, identified by the IOMAP tool, forms a psychologically significant base: holders there are either in profit or near breakeven, creating a defensive floor. Institutions deploying treasury capital have absorbed supply, with at-least three prominent ETH treasury firms collectively acquiring more than 1.6 percent of the circulating ETH since June. Their sustained accumulation reinforces bullish conviction in Ethereum’s long-term thesis.

Technical Formation At A Critical Juncture

On the daily chart, ETH–USD is carving out a bull-flag pattern following a five-week rally that peaked near $3,850. The price now tests the descending trendline of that flag around $3,672. A decisive break above this resistance—with volume exceeding the 20-day average of $12 billion—would invalidate the consolidation and set sights on $3,740 and subsequently $3,880. Key moving averages have aligned bullishly: the 20-day SMA at $3,620 offers immediate support while the 50-day EMA near $3,580 underpins the broader uptrend. RSI remains in neutral territory around 55, suggesting room for further upside before entering overbought conditions.

Derivative Dynamics And Funding Rates

Futures open interest across major venues has plateaued at $58 billion for ETH, marking a record high. Yet funding rates have stayed subdued at 0.01 percent per 8 hours—roughly half the levels recorded during the March and December 2024 breakout attempts above $4,000. Lower leverage reduces the likelihood of abrupt liquidations, allowing spot traders and treasury buyers to accumulate without excessive margin pressure. Meanwhile, negative net taker volume of $418 million reported this week highlights the unusual scenario where large sell-side imbalances co-exist with price resilience, underlining that fresh institutional bids continue to absorb supply.

Rotation Into High-Utility Presales

While ETH consolidates, early-stage investors are seeking higher-potential entry points in crypto presales. Nexchain’s Stage 24 sale has raised over $8.1 million at $0.096 per NEX token, drawing interest from AI-focused portfolios. That presale momentum underscores a diversification away from blue-chip tokens like Ethereum into protocols promising next-generation scaling and governance solutions. The $3,628 price holds as a pivot: if ETH reclaims $3,672 decisively, it may recapture attention from capital rotating out of presales. Conversely, further dips could embolden traders to reallocate funds into promising new chains.

Network Activity And Institutional Flows Sustaining Base Layer Demand

Ethereum’s daily transaction count recently neared 1.87 million—just shy of its January 2024 all-time high—driven by DeFi and stablecoin settlement. On-chain transfer volumes have spiked by 12 percent month-over-month, reflecting renewed on-chain engagement even as gas fees hovered around 28 gwei. Institutional inflows via spot ETH vehicles have contributed to a net $49 million positive inflow on August 7 alone, reversing a multi-week outflow trend. This confluence of robust network activity and corporate accumulation provides a strong foundation under the current price bracket.

Decision: Positioning Amid Consolidation

Given the confluence of shrinking exchange supply, strong on-chain support clusters, muted leverage in derivatives, and sustained institutional buys, ETH–USD appears poised to resume its uptrend once it clears the $3,672–$3,700 range. Traders seeking exposure at current levels may consider scaling into long positions with stops below $3,556, targeting a measured move to $3,740 and a breakout toward $3,880. However, a failure to reclaim the descending flag’s neckline could test $3,556 support and expose the range floor at $3,500. On balance, the data favors a bullish stance on Ethereum.

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