Cryptocurrency analytics firm CryptoQuant has reported a significant contraction in the liquid supply of Ethereum (ETH) on exchanges, with levels falling to their lowest point since 2024. According to data primarily from Binance, the amount of ETH readily available for trading has dried up, a phenomenon analysts refer to as a "liquidity dryup." This occurs when investors move assets off exchanges into cold storage or long-term holdings, reducing the active circulating supply.
The data reveals that while total Ethereum reserves on Binance remain relatively balanced at around 3.44 million ETH, the liquid supply has plummeted to approximately 534,000 ETH. In contrast, the illiquid supply—assets held for the long term—stands at about 2.91 million ETH. CryptoQuant interprets this trend as a sign of growing investor confidence and a shift towards accumulation, which could ease selling pressure and provide support for ETH prices in the short term.
Concurrently, the Binance ETH scarcity index, which measures the relationship between available supply and demand on the exchange, reached an unprecedented all-time high of 2.47 in April. This is the highest reading in the seven years of available data, dating back to 2019. Notably, this record scarcity occurred while ETH's price was correcting, falling from $2,460 on April 17 to a low of $2,260 on April 20—an 8% drop. The index has since moderated but remains above 1, indicating that underlying supply tightness persists.
As of April 22, ETH price recovered to $2,410, fueled by a large-volume candle that pushed it from $2,320 to test a key resistance level at $2,420. However, momentum appears to be decelerating at this level, with the RSI showing a bearish crossover. The market is now at a critical juncture: a sustained break above $2,420 could validate the record scarcity index as a leading indicator for price strength, while a rejection could see ETH fall back into its recent consolidation range between $2,300 and $2,380.
