Ethereum Withdrawals Trigger Historic Supply Squeeze

Ethereum (ETH) surged past $4,400 on Thursday, marking a strong start to October after closing September with momentum. The rally coincides with an unprecedented supply crunch that could fuel further gains. For the first time on record, exchanges are losing more ETH than they can bring in.

Netflows have turned negative, with billions of dollars’ worth of tokens leaving centralized platforms. This reversal signals heightened demand from both retail and institutional players, draining liquid supply at a pace never seen before. Historically, exchanges accumulated ETH when inflows exceeded withdrawals, but the current trend points to a shift toward long-term holding and off-exchange storage.

As available supply shrinks, upward pressure builds, creating conditions for a possible parabolic breakout. ETH has already reclaimed the $4,250 support zone and is eyeing resistance levels at $4,500 and $4,750. If momentum continues, analysts expect the cryptocurrency could move toward new all-time highs.

However, failure to hold $4,250 could bring short-term pullbacks toward $4,000. The combination of tightening supply and renewed market optimism positions Ethereum as a leading catalyst for the next wave of crypto market growth.