The Ethereum price keeps falling, despite supply on Binance keeps shrinking. Normally, declining exchange reserves are bullish and many immediately speculate for a rally. Coins leave exchanges, sell pressure drops, price rises. That’s the textbook theory.
If open interest is elevated, funding rates has turned negative, and traders are leaning heavily short, aggressive derivatives selling can drag Ethereum/USD lower. That’s why even if spot supply is shrinking. In that scenario, futures pressure simply overwhelms spot optimism. And that appears to be what’s happening.
Withdrawals Don’t Always Mean Holding
But, still knowing what futures activities are capable of, then let’s be real. This clearly implies that withdrawals aren’t automatically bullish accumulation anymore and theories like these are not certain indicators anymore.
Also, withdrawals also implies that ETH can leave Binance for DeFi collateral use, staking, Layer-2 activity, OTC transactions, or even transfers to other exchanges. A decline in Binance reserves doesn’t guarantee coins are locked away long term. That’s a very practical and logical thing to assume at this point about exchange reserve metrics. As Global sell pressure can still persist elsewhere.
So, shrinking supply on one exchange doesn’t necessarily mean shrinking supply everywhere.
Weak Demand and Macro Drag
Here’s another inconvenient truth, as a reduced exchange supply isn’t enough without demand presence.
In the crypto sector this demand comes from stablecoins inflows. If these are weak, then risk appetite is low, or broader market sentiment is negative, as a result ETH price won’t respond positively. In this mix, if we add macro correlation into the mix then it complicates the outlook even more bleak.
Like, if broader crypto is soft or risk markets are under pressure, then reserve signals can be completely overridden.
There’s also the possibility that large players are playing both sides: withdrawing spot ETH while opening short positions in derivatives. Strategic hedging Or positioning for lower levels.
So What’s Next For Ethereum price?
If derivatives pressure continues and liquidity gets cleared to the downside, Ethereum price prediction models increasingly point toward a deeper support retest, potentially in the $1,700 region. That doesn’t invalidate long-term structure but it does suggest pain could come first.
For now, the Ethereum price remains under pressure despite falling Binance reserves, proving once again that in this market, supply signals alone don’t move charts but positioning does.
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