All news is rigorously fact-checked and reviewed by leading blockchain experts and seasoned industry insiders.
- Ethereum reserves on Binance and Coinbase dropped by over 1.6M ETH as investors moved to self-custody and staking.
- Derivatives data showed 71.2% longs with positive funding rates, pointing to strong but balanced market confidence.
Ethereum reserves across centralized exchanges have dropped dramatically. Data indicates Binance lost approximately 700,000 ETH, while Coinbase recorded almost 900,000 ETH in just two weeks. The downtrend is in line with investor preference for self-custody and holding over short-term speculation.
At press time, ETH traded near $4,300. The decline in reserves has led to scarcity, meaning fewer tokens are available for trading. According to market principles, reducing supply while demand stays steady or increases often results in upward price pressure.
The pattern is consistent with accumulation trends, where holders remove tokens from exchanges into private wallets or staking contracts. Such behavior removes liquidity and strengthens support levels as fewer coins remain available for immediate selling.
Derivatives Data Confirms Bullish Bias
Market participants are also showing optimism through the derivatives positioning. Binance data showed 71.2% of traders in long positions and 28.8% in shorts. The long-to-short ratio was 2.47, indicating conviction in continuing upward movement.
While powerful bias reflects confidence, it comes with the danger of crowded trades. A sudden change in sentiment could result in liquidations if leveraged long positions are under pressure. However, funding rates at 0.0082% show that leverage is currently being controlled.
Moderate funding values indicate that traders are not overextending despite bullish sentiment. This balance helps maintain a healthy momentum while avoiding overheating, often preceding sharp corrections. Analysts say such moderation helps the case for a more durable rally.
Liquidation data also describes key battle zones. Dense clusters occur between $4,100 and $4,478, with concentration near $4,300. These levels will likely be points of focus for price volatility as leveraged traders are at risk of liquidation.
Revenue Declines Amid Record Prices
On-chain data shows Ethereum’s revenue fell despite the token hitting new highs. Token Terminal’s revenue dropped 44% month-over-month in August to $14.1 million, from $25.6 million in July.
Network fees followed suit, down 20% to $39.7 million. Much of the decline is due to Ethereum’s Dencun upgrade in March 2024, which lowered transaction costs for layer two rollups. While the upgrade increased scalability, it decreased fees for layer one transactions, decreasing one of the main sources of ETH value.
The development has sparked a renewed discussion on Ethereum’s economic model. Critics argue that lower fee income threatens long-term sustainability, while proponents believe the network’s role as global financial infrastructure outweighs short-term revenue shifts.
Despite revenue declines, Ethereum continues to attract institutional investment. As Crypto News Flash previously reported, Etherealize, a company focused on corporate Ethereum adoption, raised $40 million in September. Backed by the Ethereum Foundation and Vitalik Buterin, the initiative aims to provide regulation-ready tools for companies entering the ecosystem.
Funds will support platforms for private trading and settlement of tokenized assets, such as bonds and fixed income products. Co-founder Grant Hummer stressed that many institutions still lack the expertise to engage with Ethereum effectively.
Meanwhile, staking remains a popular venue for long-term holders. Institutions are not only looking at staking as an opportunity to earn yield, but also as a way to secure the network and solidify Ethereum’s role in decentralized finance.
