Ethereum Price Confirms Bullish Reversal as Exchange Supply Drops

Following weeks of losses, Ethereum is showing signs of recovery as its exchange supply decreases. The price climbed from $2,680 on Nov. 21 to over $3,000, pointing to a possible shift in market trend. Experts say keeping this level could show a wider trend reversal. Even though it is almost 40% below its record high in August, Ethereum’s recent performance is encouraging traders and investors.

Exchange Supply Declines Signal Stronger Market Support

A major factor supporting Ethereum’s recent recovery is the steady decline in tokens held on exchanges. Data from CryptoQuant shows that exchange reserves have dropped from 20.9 million ETH in early July to 16.8 million today, a decrease not seen in years. When fewer tokens are available on exchanges, selling pressure eases in the short term.

This shows a shift toward long-term holding. Many investors are putting ETH into cold wallets, staking platforms, or DeFi protocols to protect their assets or earn yield instead of seeking quick profits. With less liquidity, even small buying can push prices higher.

This pattern also follows seasonal trends. Exchange balances often decrease toward the end of the year during accumulation phases, when traders get ready for potential gains in the new year. The continued caution aside, the lower supply suggests a notable shift in market behavior.

Network Upgrades and Community Sentiment

Ethereum’s upward momentum is receiving additional support from the expected Fusaka upgrade, possibly set for Dec. 3. This update is anticipated to be the largest since The Merge and is designed to improve data availability for rollups, tackling a major scalability issue on the network.

Community excitement about Fusaka has generated positive sentiment, with discussions highlighting potential improvements and adoption scenarios. Such attention can often influence market behavior as traders position themselves ahead of major technological milestones.

Optimism surrounding Fusaka may be encouraging accumulation while exchange supply remains low, supporting a bullish reversal. Ethereum’s price appears particularly sensitive to developments at the network level.

The Impact of Institutional Inflows

Ethereum’s recovery has received strong support from institutional activity. Data from SoSoValue shows that nine U.S. spot ETH ETFs recorded $236 million in net inflows this week, reversing three consecutive weeks of outflows totaling $1.7 billion.

Significant ETH purchases by major institutions are ongoing, and many investors prefer staking their assets over leaving them on exchanges. This growing interest from institutions supports market confidence and points to a longer-term positive sentiment.

Tom Lee(@fundstrat)'s #Bitmine just bought another
14,618 $ETH($44.34M) 4 hours ago.https://t.co/P684j5Yil8 pic.twitter.com/LHOpDto1R5

— Lookonchain (@lookonchain) November 28, 2025

The combination of exchange outflows and institutional buying suggests a shift in Ethereum’s market. Liquidity is concentrated among fewer holders, making sudden sell-offs less likely and increasing the impact of positive news. Investors may find opportunities as the market reacts to news and technical developments.

Key Levels to Watch Next

Ethereum has broken out of a falling wedge, a pattern that often leads to a bullish reversal. The next resistance is the 200-day moving average at $3,096, which has been a barrier since early November. A move above this level could push Ethereum toward $3,600.

However, if Ethereum falls below $3,000, it could drop to $2,750. Overall, reduced exchange balances, upcoming protocol upgrades, and growing institutional activity suggest the crypto may be entering a period of renewed bullish sentiment.