Ethereum retested the $2,000 level with a 0.6 percent increase in the last 24 hours. A critical supply indicator tracked on the Binance exchange, where Ethereum is traded, gave a positive value of 0.67. While the price movement remains volatile, the index in question reveals that liquidity in the order book of the exchange has decreased.
What Do Supply Signals Mean?
The Scarcity Index, tracked by CryptoQuant, measures the deviation of Ethereum’s reserves on exchanges compared to historical averages. The positive value of the index indicates that the number of Ethereum that can be traded on the platform has decreased below average levels and the liquidity in sell orders has decreased. Although the current value of 0.67 does not indicate a sudden supply shock, it indicates that the market is witnessing a structural change. In the past, it was observed that after the turns from negative to positive, the sales pressure decreased and recovery processes began.
Price Movement and Possible Scenarios
Ethereum is moving tightly in the $1,900 to $2,100 range. The asset is currently below the 50-day moving averages at $2,278 and the 200-day moving averages at approximately $3,038. This technical fragility shows that while supply is decreasing, the demand side is still stuck with strong resistances. If buyers can carry the thinning of the order book above $2,150, they will face a new resistance group in the $2,200 to $2,400 band. A resurgence of $2,278 could provide technical alignment with positive on-chain indicators.
Some market players comment that Ethereum is becoming more preferred in financial infrastructures with the increase in institutional interest. On the other hand, if the squeeze is broken downwards, the Scarcity signal is invalidated by selling volumes, which may lead to a retest of the 1,800 support.
Merlijn The Trader, in his social media post, made the assessment that the four-year horizontal course in Ethereum has ended and stated that above $ 2,500 will show a strong break, and below $ 1,900 may bring a final decline in the short term.
Institutional Movements and Other Indicators
It is stated that the most important factor that will confirm the rise in the Scarcity index is the transaction volume. Investors are closely watching whether spot buying increases in a low supply environment. Significant movements are also seen in institutional flows. BlackRock sold over 28,000 Ethereum at the beginning of the week. However, the last two days have seen new inflows totaling more than $70 million. If the positive data trend on the ETF side continues, it may support the recovery in the spot market and move the price above $2,200.
In corporate Ethereum purchases, Bitmine company, led by Tom Lee, purchased large amounts from the exchange and locked a total of over 3 million Ethereum in their wallets. The company maintains an Ethereum reserve of approximately $6 billion at current prices. In addition, regulatory developments, such as the new lawsuits filed by Binance against media institutions, are among the factors that can directly affect user behavior and the liquidity flow of platforms.
While the Scarcity index rises above 1.0, if the price continues to remain above $2,000, the possibility of a supply shock in the market increases.
