Why are prices still flat when Ethereum is facing a supply shock?

Ethereum (ETH) shows all the signs of a textbook supply shock, accompanied by a record balance of exchange, a surge in staking demand, and an accelerated institutional inflow.

But despite this tight supply, Ethereum prices remain flat, with analysts debating whether retail sales have been one of the most bullish setups for many years.

Ethereum drains while bitcoin climbs

According to analyst Crypto Gucci, even though the balance between the Bitcoin (BTC) exchange and the highest for months, ETH reservations for intensive exchanges have fallen to a fresh low.

“Investors are stocking up on ETH and dumping BTC… the ETH supply shock is coming,” analysts warned.

The fork underscores the growing confidence in Ethereum’s long-term value proposition, even if short-term price action is delayed.

On the other hand, on-chain data confirms that ETH is trapped at a historic rate. Specifically, Ethereum’s staking entry queue has skyrocketed to its highest level since 2023. Additionally, 860,369 ETHs worth $3.7 billion are currently awaiting bets.

Everstake, a staking protocol, said this was the biggest queue as Shanghai upgrades enabled withdrawals two years ago.

“More people want to trust and participate in ensuring Ethereum’s long-term value,” the company said.

Everstake also pointed to a mix of institutional participation, favorable market conditions, and increased network trust.

Currently, more than 35.6 million ETH have already been stolen. This portion of the total supply, accounting for 31%, is worth around $162 billion.

Muddy eth. Source: validatorqueu.com

Institutions and Treasury will be stacked up in Ethereum

Institutional appetite, on the other hand, plays a central role. Analyst Hasu observed that almost 10% of ETH supply is now held in public vehicles, a milestone reflecting adoption.

Varys Capital’s Ventures Head Tom Dunleavy added that the finance company had scooped over 3% of its total ETH supply in just two months. This highlights the rapid pace of accumulation.

“In less than two months, more than 3% of the total supply of ETH was scooped up by the finance company,” writes Dunleavy.

The Corporate Treasury already has 4.7 million ETH, or $20.4 billion, and is committed to the most staking strategies.

This now records Balidator entry queues to levels. At the same time, the exit queue has been declining by 20% since August, reducing the risk of mass escape.

Retail sales meet the accumulation of Ethereum whales

Despite these bullish trends, ETH is trading at $4,368 at the time of this writing. It’s over 12% from an all-time high on August 24th, and analysts say retail sales will reduce price momentum.

Ethereum (ETH) price performance. Source: TradingView

Defi Ignas points out that whales in the 10,000-100,000 ETH range are “loading fast” compared to 100-1,000 ETH holders dump. Analysts are called the same setup as seen before all major ETH rallies.

Similarly, Sigil Fund Cio Dady Fiskantes suggested that some investors could spin ETHETH into Ethereum ETFs (Exchange-Traded Funds) to reduce custody risks, similar to previous Bitcoinflow.

However, Ignus questioned the timing, contradicting the notion that Eswhalla acts like a large holder of Bitcoin. Others are more bullish.

“…Retail outlet liquidity has always been ignition fuel. Once completely washed away, eslip. Flat prices are a bullish signal,” said the analyst trader.

Analysts argue that the fundamentals are set to explosive movements. Ethereum prices are trapped between strong institutional accumulation and permanent retail sales, exchange reserves at record lows, and queues at record highs.

When Post Ethereum is facing a supply shock, why are prices still flat? It first appeared in Beincrypto.