Ethereum’s rally stalled short of its 2021 peak, but analysts say a deepening supply shortage could ignite a powerful bull run by year’s end.
Ethereum climbed near its 2021 all-time high earlier this month before macroeconomic headwinds from the U.S. triggered a pullback. Still, analysts argue the broader trend remains bullish, driven by heavy institutional inflows and tightening supply.
Japan-based XWIN Research highlighted that ETH reserves on exchanges have dropped sharply since late July, with daily withdrawals often surpassing 100,000 ETH. The largest single move saw nearly 93,000 ETH ($412 million) leave Kraken in just one day.
ETFs Fuel Record Inflows
Spot ETH ETFs are playing a central role in the rally. According to XWIN, ETFs recorded a record $2.85 billion in weekly inflows, adding to pressure on dwindling exchange balances. Currently, just 18.4 million ETH remain on exchanges, underscoring the growing scarcity.
“With so much ETH being pulled from exchanges while institutional buying accelerates, the conditions for a supply-driven bull market are strengthening,” the firm noted.
Treasury Firms Step In
Coinbase Head of Research David Duong echoed this outlook, pointing to the role of Ethereum treasury companies in accumulating large holdings. Since the start of August, digital asset treasuries have purchased roughly 795,000 ETH worth $3.6 billion — equivalent to about 2% of the total circulating supply.
Duong added that these firms are likely to continue accumulating, a trend that could amplify Ethereum’s next breakout and drive the market toward new highs.
The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Source: https://coindoo.com/ethereum-supply-shock-incoming-is-6000-next/