Ethereum’s exchange balances have dropped to their lowest point in nine years, signaling strong conviction among long-term holders. Yet, analysts warn that a sharp price drop toward $3,700 could trigger major liquidations, creating a risky near-term setup for ETH traders.

Exchange Balances Hit Nine-Year Low

Data from Glassnode shows ETH balances on exchanges have fallen from 31 million at their peak to just 14.8 million today. That’s a 52% decline, marking the lowest level since 2016. Investors appear to be shifting coins into staking contracts, cold storage, and institutional custody.

The launch of the first Ethereum staking ETF has further fueled demand. This trend reduces the liquid supply available for trading, which can increase volatility during periods of rising demand or sudden sell pressure. As fewer coins sit on exchanges, large inflows or outflows have a sharper impact on price.

Despite this bullish supply signal, short-term risks remain. Analyst Ted (@TedPillows) noted that liquidation risks are building around the $3,700 to $3,800 range. He argued that Ethereum could revisit this support zone before stabilizing. If ETH fails to hold above $3,700, it could trigger forced selling from leveraged traders.

Whales Buy the Dip as Traders Brace for Volatility

At the same time, whale accumulation has intensified. Lookonchain reported that 16 wallets purchased 431,018 ETH worth $1.73 billion between September 25 and 27. Major buyers included Kraken, Galaxy Digital, BitGo, FalconX, and OKX. Earlier, whales had added another $204 million in ETH, underscoring growing institutional interest.

Whales keep accumulating $ETH!

16 wallets have received 431,018 $ETH($1.73B) from #Kraken, #GalaxyDigital, #BitGo, #FalconX and #OKX in the past 3 days.https://t.co/0DPxgZMGN7 https://t.co/xtPLBKo9LZ pic.twitter.com/oEXZKIErmr

— Lookonchain (@lookonchain) September 27, 2025

These inflows suggest that while retail sentiment looks cautious, deep-pocketed players see the pullback as a buying opportunity. Whale demand often acts as a stabilizing force, though it does not erase short-term risks tied to leveraged positions.

ETH price is now trading near $4,011, down 10% in the past week and 0.33% in the past 24 hours. It briefly dipped below $3,980 before recovering, but it remains under its recent close at $4,034. Bulls must defend the $3,700 to $3,800 zone to avoid cascading liquidations.

The picture remains mixed. On one side, exchange supply keeps shrinking, and whales are accumulating billions in ETH. On the other hand, concentrated leverage threatens short-term stability. Traders now watch $3,700 closely as the level that could define Ethereum’s next major move.