Why does ETH need to hold this support?

Ethereum (ETH) has just surpassed the $2,392 mark — a reasonable price for those sending ETH to Binance, and also an important on-chain support level.

With the supply on the exchange gradually depleting, maintaining this level could help alleviate selling pressure. However, if ETH slips below, investor confidence could quickly turn into concern, triggering a new wave of distribution.

The reasonable value of Binance becomes a key point

As mentioned, ETH is currently trading just above the fair price of the addresses sending coins to Binance — which is determined at $2,392 at the time of writing.

According to data from CryptoQuant, this is the average price at which Binance users have bought in, making it a significant psychological and structural level.

The chart shows that ETH tends to bounce back each time it approaches this level, clearly reflecting its impact on market behavior in the short term.

Source: CryptoQuantWhile the addresses sending ETH from OKX users recorded a higher reasonable price of $2,706, the average from Binance has a greater influence due to this exchange holding a large proportion of ETH reserves across exchanges.

If ETH stays above the 2,500 dollar mark, most major investor groups — especially those who frequently interact with the centralized exchange (CEX) — will still maintain a profitable position. However, if the price drops sharply and persists, it could trigger widespread selling pressure and increase negative volatility.

ETH reserves on exchanges hit a multi-year low

The amount of ETH reserves on exchanges has decreased to 18.7 million ETH — the lowest level since mid-2022, indicating a continuous trend of withdrawing coins from centralized platforms.

As the chart shows, the steady decline in the supply of ETH on the exchange since the beginning of 2023 reflects decreasing selling pressure, as more and more long-term holders choose to self-custody (custody) instead of keeping their coins on the exchange.

Source: CryptoQuantThis decline is interesting as it coincides with ETH's recent rally to $2,500, suggesting that the decline in circulating supply is acting as a buffer against stronger corrections.

Unless the influx of capital surges, the thinning supply on exchanges may limit downside risk. It can also reinforce the bullish momentum, especially as macro demand narratives surrounding Ethereum continue to build.

The rally cools down as ETH faces difficulties

Ethereum is consolidating around the $2,514 level at the time of writing, showing signs of hesitation after a brief price surge. The RSI is at 52.9 – the neutral zone – indicating a lack of strong momentum in either direction. Meanwhile, the MACD continues to trend downwards, with the signal line diverging below the MACD line. This suggests that the bullish momentum is weakening and is likely to face downward pressure in the short term.

Source: TradingviewThe candlestick patterns show a downward movement and smaller candle bodies, reinforcing the idea of market hesitation. For ETH to regain upward momentum, buyers must decisively step in above 2,530.

If not, failing to maintain above the actual price threshold may lead to a deeper retest of lower support levels.

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