$380M ETH Exchange Outflows Suggest Supply Squeeze as Bulls Rebuild

• Over $380 million in Ethereum has flowed out of exchanges in the past week.
• Large ETH holders have increased their positions, reversing a long-term downtrend in wallet concentration.
• On-chain data suggests growing investor confidence despite subdued trading volumes and ongoing market caution.

Ethereum (ETH) continues to flow out of centralized exchanges at a significant rate. Over the past seven days alone, net outflows surpassed $380 million, according to blockchain analytics firm IntoTheBlock.

This reduction in exchange-held ETH reflects growing investor accumulation into self-custody and could point to a tightening supply narrative that has historically preceded price rallies.

ETH Accumulation Persists Despite Price Volatility

Data shows Ethereum’s net flows from exchanges were consistently negative between April 24 and May 1, with a particularly large outflow recorded on April 26. This behavior suggests that investors took advantage of short-term price dips to buy and withdraw ETH into self-custody.

Despite price fluctuations during the week, ETH ended the period on a positive note, climbing back above $1,840. Analysts interpret sustained exchange outflows as a bullish sign as reduced supply on exchanges lowers the risk of sell pressure and may create the conditions for a breakout if demand increases.

On-Chain Data Shows Whale Accumulation, Steady Activity

This outflow trend supports the broader narrative that Ethereum could be setting up for a major rebound after massively underperforming Bitcoin this cycle. Recent data from CryptoQuant shows that the distribution of Ethereum supply by wallet size indicates that the largest holders are either maintaining their positions or continuing to accumulate.

CryptoQuant analyst Darkost highlighted that wallets holding more than 100,000 ETH have grown by approximately 3% since August 2024. He sees this as a sign of “smart money” positioning. He noted that since 2020, the proportion of ETH held by large wallets had gradually decreased, but that trend now appears to be reversing.

More Bullish On-Chain Data Pointing to a Likely Rally for Ethereum

Darkost also noted that the number of active addresses has remained steady despite ETH’s price decline. He observed considerable selling pressure in the derivatives market, though this may be easing. Notably, Net Taker Volume turned positive on April 23 and 24, which could signal the beginning of a bottoming process if the trend continues.

Darkost stressed that these metrics run counter to the “Ethereum is dead” narrative. Essentially, despite ETH currently trading about 62% below its 2021 all-time high, on-chain data points to enduring strength and strategic accumulation.

How to Approach ETH

Darkost concluded that while some encouraging long-term signals exist, on-chain data still reflects a lingering sense of pessimism around ETH. He also noted that open interest has dropped significantly and that trading volumes remain subdued, both of which underscore the cautious market sentiment.

In his view, the most prudent approach right now may be to wait for a clear invalidation of the bearish trend or, at most, to engage in a light dollar-cost averaging (DCA) strategy.

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