Ethereum (ETH) has recently experienced a notable price drop, causing concern among traders. However, new on-chain data reveals an intriguing shift in market sentiment. According to Santiment, Ethereum’s exchange reserves have fallen to a historic low of just 8.97 million ETH as of March 21, 2025, marking the lowest point in the last ten years. This drop, which has seen reserves decline by 16.4% in just the past seven weeks, is viewed by many experts as a sign of bullish accumulation, despite the ongoing price decline.

Ethereum’s Falling Reserves: A Bullish Indicator?

The sharp decline in Ethereum’s exchange reserves is considered significant because it indicates that investors, particularly whales and long-term holders, are choosing to accumulate ETH rather than sell during this dip. Typically, when reserves drop, it suggests that investors are moving their tokens off exchanges and into private wallets, signaling that they expect future price increases. For the first time in nearly a decade, Ethereum’s exchange reserves have fallen below the critical 9 million mark, which was last seen in November 2015.

As ETH prices continue to face downward pressure, this reduction in available supply on exchanges implies that investors might be betting on a future rebound. The decision of whales and institutional investors to hold rather than liquidate during a decline is often seen as a bullish sign, reflecting confidence in the long-term value of the asset.

Ethereum’s Current Price and Market Activity

Despite the decreasing reserves, Ethereum’s current market activity paints a more cautious picture. As of March 21, 2025, ETH is trading near $1,960, a 0.50% decline over the last 24 hours. This price drop is not accompanied by a significant increase in trading volume, which has fallen by 40%. A decline in volume typically suggests a slowdown in market activity, possibly driven by a lack of conviction or uncertainty among short-term traders.

While this drop in trading volume might seem negative, the reduced market participation could indicate that many traders are waiting for more clear signals before taking a position. This could present an opportunity for long-term investors who are more focused on Ethereum’s fundamentals and less concerned with short-term price fluctuations.

Technical Analysis: Can ETH Bounce Back?

Looking at Ethereum’s technical chart, there are signs of resilience despite the price decline. ETH has recently emerged from a prolonged consolidation phase that lasted over a week, indicating a possible shift in momentum. After retesting its previous consolidation zone, Ethereum’s price seems to be stabilizing, which could lead to an upward movement.

Expert technical analysts predict that if Ethereum can hold above the $1,950 mark, it has a strong chance of rebounding. A potential surge of around 12% could see Ethereum reach $2,200 in the near future, based on historical price patterns. However, the price remains well below its 200 Exponential Moving Average (EMA) on the daily timeframe, suggesting that it is still in a bearish market phase. But as history has shown, Ethereum’s price could rebound swiftly once it gains enough buying support.

Conclusion: A Bullish Setup Despite the Decline

In conclusion, while Ethereum’s price has faced some short-term challenges, the significant decrease in exchange reserves signals that large investors are confident in ETH’s long-term prospects. As fewer tokens are available on exchanges, this scarcity could act as a catalyst for future price growth once market sentiment shifts positively. With key technical levels being closely monitored, Ethereum is positioned for a potential price rebound. Investors are closely watching the $1,950 level as an indicator of further upward momentum. Therefore, despite the current decline, Ethereum’s market dynamics suggest a bullish outlook in the medium to long term.