Key Insights
- •Ethereum (ETH) price showed signs of a potential bounce.
- •Exchange balances fell to 8.84% of total supply, the lowest level ever recorded.
- •Multiple traders flagged ETH’s relative strength against Bitcoin.
- •Technical analysts outline upward targets as ETH entered the tightest supply environment in history.
Ethereum (ETH) price action captured trader attention on December 5. Technical setups converged with what analysts characterized as an unprecedented supply squeeze on centralized exchanges.
The combination of tightening on-chain metrics and emerging chart patterns suggested the foundation for a sustained upward move.
This update comes even as broader crypto markets digested Bitcoin’s (BTC) recent volatility and uncertain macro conditions.
Trader Michaël van de Poppe noted that ETH had established a promising starting point for recovery. He stated that higher timeframe support held and represented the first step in a broader reversal.
He suggested that Ethereum would outperform Bitcoin in the coming period and that the entire Ethereum ecosystem would thrive.
The assessment came as the ETH/BTC pair tested a critical support zone between 0.031 and 0.034 satoshis, an area van de Poppe labeled as ideal for accumulation.
ETH/BTC Pair Tests Multi-Month Support Zone
The ETH/BTC chart showed Ethereum trading near 0.03440 against Bitcoin. It was hovering just above a multi-month support region that had contained price action throughout 2024 and into 2025.
The technical structure indicated a potential double-bottom formation. The current level represented the second test of a range that extended from approximately 0.026 to 0.034 satoshis.
A decisive hold above this zone would target the 0.055 level, indicating a potential 60% gain against Bitcoin from current levels.
The daily timeframe displayed a descending trendline that had capped rallies since mid-2024, with price now consolidating beneath that resistance.
Traders viewed the current area as a technical support convergence where risk-reward favored long positions, particularly if Bitcoin’s chart remained range-bound or showed signs of distribution.
Exchange (ETH) Balances Hit All-Time Low
Milk Road highlighted that Ethereum quietly entered its tightest supply environment ever recorded, with exchange balances falling to 8.84% of total supply on December 5.
This metric represented an all-time low for ETH availability on centralized trading venues.
By comparison, Bitcoin still held approximately 14.8% of its supply on exchanges, nearly double Ethereum’s proportion, suggesting vastly different supply dynamics between the two largest cryptocurrencies.
The tightening reflected Ethereum’s migration into staking contracts, restaking protocols, layer-two activity, data availability layers, collateral loops, and long-term custody solutions.
These use cases removed ETH from liquid circulation and created structural demand that was not driven by speculative sentiment or short-term price action.
While market sentiment appeared heavy in early December, the underlying supply fundamentals continued to improve as tokens flowed out of venues where selling pressure typically originated.
Milk Road emphasized that sentiment did not dictate supply, noting that Ethereum price tightened in the background while the market decided its next move.
Historical precedents from previous cycles indicated that sustained declines in exchange balances often preceded significant rallies, as reduced sell-side liquidity amplified buying pressure once momentum shifted.
Technical Targets Range For Ethereum (ETH) From $3,336 to $4,885
Trader Crypto Caesar identified that Ethereum would soon encounter resistance but noted that the reversal structure looked constructive.
His daily chart for the ETH/USDT pair showed the price in the current $3,000 zone testing a support near $2,616, with immediate resistance at the weekly level around $4,885.
The analysis highlighted a breakout from a long-term descending channel in mid-2024 that had established the foundation for the current consolidation range.
Caesar’s chart highlighted several key levels that would determine Ethereum’s price trajectory in the coming weeks.
The area between $2,482 and $2,616 represented strong support, where previous rallies had originated, while overhead resistance extended from the $4,789 to $4,885 zone, which coincided with the 2024 weekly high.
Will Ethereum Provide Sustained Gains?
Trader Tim provided additional context from a shorter-term perspective. He noted that while Bitcoin’s chart appeared structurally weak, Ethereum showed relative strength.
It is the only pair he considered for long positions. His four-hour chart for ETH perpetual futures showed price trading at $3,067.
That is just above the previous week’s low at $2,761 and the monthly open at $2,943.
Tim identified a daily fair-value gap that would serve as his preferred entry zone for long positions, with targets extending to the previous week’s high at $3,099 and potentially to the yearly open at $3,336.
Tim acknowledged that the setup felt uncomfortable given Bitcoin’s weak appearance. However, he emphasized that the daily structure remained intact.
He mentioned that it offered better risk-reward than other major cryptocurrencies. The daily fair value gap he referenced ranged from $2,943 to $3,064.
That is an area where algorithmic buying interest had previously emerged and where price might find support before resuming an upward trajectory.
Ethereum price consolidated above critical support as exchange supply reached record lows and technical analysts mapped potential upside targets.
Whether the convergence of tightening fundamentals and constructive chart patterns would translate into sustained gains depended largely on Bitcoin’s ability to stabilize and risk appetite returning to crypto markets.
The structural changes in Ethereum’s on-chain economy, however, suggested that supply constraints would remain a persistent tailwind regardless of near-term sentiment.