As the market gains some relief, Ethereum is testing its resistance. Price is the deciding factor. And CryptoQuant analysts have identified the supply structure below that resistance level. This is unprecedented in the current cycle and was evident in the cycle before that.
Analyst data reveals that Ethereum exchange supply has collapsed by 57%. Reserves have decreased from approximately 35 million ETH to 14.9 million ETH, and this reduction results in significantly less ETH available for immediate sale compared to comparable points in the 2020-2021 period. The coin hasn’t disappeared. They have been transferred to the control of holders who have not sent them to exchanges for sale.
Inflow data supports the overall picture of behavior. Although currency inflows have increased recently, their size remains well below the peak at the top of the cycle in 2021-2022, when inflows approached the 10 million to 20 million ETH range. The current cluster is part of those peaks. The large-scale distribution that characterized the top of the previous cycle is not present in the data.
Ethereum’s test resistance would be a structurally different test without the 57% reduction in salable supply from the previous cycle’s peak and the distributional behavior associated with that peak. There is overhead. Ammunition to sustain it is historically scarce.
Two traffic lights. one conclusion
The analyst’s framework is based on the relationship between two independent data points that are currently moving in a historically significant configuration. The first is what happened to foreign exchange reserves. The 57% crash removed a large portion of the readily available sell-side supply of ETH from the market.
The second thing is that foreign exchange inflows are not happening. The extreme deposit surge (in the 10-20 million ETH range) that characterized the 2021-2022 distribution phase has not returned. Holders are not flooding exchanges with ETH to take large profits or cut losses.
This combination of depleted supply and absent distribution represents a market with significantly reduced downward structural pressures, without the structural signals of panic that typically accompany the deepest troughs of business cycles. The market has not experienced a forced sell-off on a scale comparable to past deep lows. The environment continues to be quiet.
Pricing context adds the final dimension. Ethereum is currently trading near the lows of its previous correction range. This price level represented a zone in previous cycles where the balance of risk and reward shifted in favor of patient capital over continued selling.
Analysts have carefully labeled this a “constructive signal in the current situation.” This is not a confirmation. This is not a guarantee. Taken together, the structural consistency between supply depletion, lack of distribution pressures, and historically significant price levels represents a market in which the conditions for recovery exist, even if the catalyst has not yet arrived.
Ethereum reuses weekly pivot as recovery testing structure
Ethereum is trading around $2,350-$2,400 on a weekly basis, reclaiming a key pivot level that has repeatedly acted as both support and resistance throughout the current cycle. After experiencing a sharp drawdown in early 2026, ETH rebounded from the $1,600-$1,800 region, with strong demand halting the decline.
The current structure reflects that the market is returning to equilibrium. Currently, the price is interacting with the 100-week (green) and 200-week (red) moving averages and converging around the $2,300 zone. This region represents an important technical threshold, and while regaining this region would suggest stabilization, failure would reinforce broader corrective trends.
The 50-week moving average (blue) is leveling out and starting to turn higher, indicating that near-term momentum is improving. However, ETH has not yet established a clear high on the weekly time frame and the recovery remains unconfirmed.
The trading volume pattern is consistent with a post-capitulation environment. A sharp rise during a sharp decline indicates a forced liquidation, and a subsequent normalization suggests less stress, but not strong accumulation.
Structurally, Ethereum is in a decision phase. Continued acceptance above $2,400 would pave the way to $2,800-$3,100, while rejection is likely to send the price back to the $2,000 support zone.
Featured image from ChatGPT, chart from TradingView.com
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