According to @rovercrc, ETH exchange reserves fell 20.4% during the latest rally, highlighting notable outflows from centralized venues, source: @rovercrc. A sustained decline in exchange balances is associated with reduced near-term sell-side liquidity and higher price sensitivity to incremental demand, source: Glassnode research. Traders can validate a potential supply squeeze by monitoring Exchange Netflow, Exchange Reserves, and Taker Buy-Sell Ratio together with perpetual funding and basis, source: CryptoQuant Academy. A swift flip to positive netflows and rising on-exchange balances can precede local tops as supply returns to order books, source: Glassnode research. With thinner spot liquidity, execution risk increases and price discovery can accelerate; monitoring order book depth and liquidity concentration is advisable, source: Kaiko market structure research.

According to @rovercrc, Ethereum exchange reserves are dropping hard, with a chart shared on Sept 3, 2025 indicating a sharp decline in ETH held on centralized exchanges (source: @rovercrc). The author frames this as whale accumulation that could limit immediate sell-side supply and tighten spot liquidity for ETH, which traders may interpret as a potential supply-squeeze setup (source: @rovercrc). Traders commonly monitor exchange reserves as a supply-side metric to gauge potential price impact, as outlined by on-chain analytics education resources such as Glassnode Academy (source: Glassnode Academy). Market participants may watch exchange reserve and netflow metrics to confirm sustained outflows, in line with the post’s focus on exchange balances (source: @rovercrc).

According to @rovercrc, ETH supply on centralized exchanges is drying up quickly, suggesting fewer coins available for immediate spot selling, source: @rovercrc on X, Aug 16, 2025. Historically, declining exchange reserves are interpreted as reduced near-term sell pressure and tighter sell-side liquidity, which can magnify price impact during inflows, source: Binance Academy (Exchange Reserves), CryptoQuant (Exchange Reserve metric documentation). Traders can monitor on-chain exchange-reserve dashboards alongside order book depth to confirm the signal before positioning in ETH spot or perpetual futures, source: Binance Academy (on-chain indicators), Kaiko Research (order book depth and liquidity).

According to @rovercrc, ETH reserves on centralized exchanges are plunging while institutions are buying billions, a setup traders monitor for changes in readily available spot supply and liquidity (source: @rovercrc). For trading, track ETH net exchange flows, institutional-sized inflows, and spot-liquidity depth to validate or refute the supply narrative and adjust risk around potential volatility and breakouts (source: @rovercrc).