A recent decline in the supply of Ethereum held on major exchanges has been observed, following a security breach at Binance on October 29. On-chain data suggest that this withdrawal may be linked more to a reduction in market liquidity rather than an immediate panic reaction.
Exchange ETH balance drops in two phases
Between October 28 and November 2, the share of Ethereum reserves held on exchanges decreased from 3.56% to 3.20% of the total ETH supply. More than half of this 0.36 percentage point drop occurred on October 29, the day the Binance attack was disclosed.
TRM Labs, a blockchain analytics firm, reported that attackers withdrew approximately 200,630 ETH from Binance’s hot wallet during the incident.
TRM Labs confirmed that around 200,630 ETH was taken from a Binance hot wallet during the breach.
However, the ETH balance in the largest exchange wallets did not decline immediately on October 29. In fact, these wallets saw an increase of nearly 39,000 ETH that day. The most substantial reduction began after withdrawal operations resumed, with approximately 313,000 ETH leaving these addresses across November 1 and November 2.
Mini dictionary: TRM Labs, a company specializing in blockchain monitoring and analyzing the movement of digital assets, provides compliance and risk management services to major cryptocurrency exchanges and financial institutions.
Weakening liquidity takes center stage
Overall, the main exchange wallets lost about 297,000 ETH between October 28 and November 2, which represents a 5.4% decrease. This trend raises the possibility that the movement was not just a short-lived wave of fear, but also a symptom of thinning liquidity across the market.
A drop in exchange balances does not necessarily mean investors are simply accumulating. Assets may have been transferred to cold wallets, dispersed among various accounts, or sent to alternative platforms. The exact final destination of these funds cannot be reliably determined by observing exchange addresses alone.
The decline in ETH reserves on exchanges appears to reflect liquidity movement more than a verifiable supply shock.
Ethereum price outlook remains subdued
During this period, the price of Ethereum held a weak position, trading near $2,264, still below its late October high of roughly $2,800. The asset continued to trade below several key moving averages, indicating persistent selling pressure in the market.
The $2,300 to $2,400 price range stands out as a significant short-term threshold. A sustained move above this range could support a shift in market sentiment, while a dip below $2,200 may bring further downside risk.
Against this market backdrop, the main question remains whether the withdrawn ETH has truly exited active trading circulation. Without stabilization in flow patterns, it is considered premature to label the shrinking exchange supply as a straightforward positive sign.
| Date | ETH on Exchanges (% of Supply) | Notable Events |
|---|---|---|
| October 28 | 3.56% | Pre-Binance attack levels |
| October 29 | ~3.38%* | Binance attack reported, initial large withdrawals |
| November 2 | 3.20% | Withdrawals after operations reopen |
