Is ETH About to Boom? Reserves Are Dropping! So What’s the Missing Piece?

Key Points

• ETH reserves fall on exchanges, lowering sell-side liquidity and boosting long-term confidence.
• Q3 2025 closed with +60.58%, echoing past strong setups before major Q4 rallies.
• Analyst Ted sees $4,250 as pivot; breakout could send ETH toward $4,750.

Ethereum reserves on spot exchanges are falling, reflecting a shift toward self-custody and staking. This decline reduces sell-side liquidity while suggesting growing confidence in ETH’s long-term outlook.

Past episodes of reserve drops highlight different narratives. During network congestion and the UNI airdrop, easing macro conditions fueled demand and triggered a bull run.

In contrast, during the late bear phase, reserves fell as old holders moved coins off exchanges amid the FTX crisis. Later, improved macro data reignited demand, allowing Ethereum to recover strongly.

The current pattern again shows reserves falling while price stays flat, indicating buying is absorbed by simultaneous selling. This creates a foundation for a rally once demand clearly accelerates.

Price Action, Resistance Levels, and Historical Momentum

Ethereum closed Q3 2025 with a 60.58% gain, its strongest third-quarter since 2020. Historical data shows strong Q3 performances often precede powerful Q4 rallies.

For example, in 2020 Ethereum gained nearly 60% in Q3 before doubling in Q4, and similar patterns appeared in 2017. Median Q4 returns following strong third quarters stand at 22.59%, suggesting favourable seasonal dynamics.

Currently, Ethereum trades near $4,098 after a pump driven by short liquidations, according to analyst Ted. He identifies $4,250 as the critical resistance level that must be reclaimed to confirm bullish continuation.

If ETH breaks above $4,250, Ted projects a move toward $4,750, strengthening the case for renewed momentum. Failure to reclaim this zone could lead to pullbacks toward $3,800–$3,600, or even $3,550.

This makes $4,250 a decisive pivot level as Ethereum balances between renewed upside and possible correction.

In the bigger picture, falling reserves show trust and preparation, but demand must rise to ignite the next rally. Until then, Ethereum remains at a critical juncture with both risks and opportunities in play.