Key Takeaways
How is Ethereum responding to the global liquidity expansion?
Exchange reserves continue to decline as liquidity growth strengthens, signaling increased accumulation and reduced selling pressure.
What signals are emerging from derivatives data?
Cooling sentiment, steady engagement, and rising short liquidations reflect cautious optimism and strengthening bullish positioning.
Ethereum’s [ETH] liquidity landscape has begun shifting rapidly, as exchange reserves continue to decline while global M2 expansion accelerates.
The latest data shows exchange balances have dropped to nearly 16.1 million ETH, signaling intensified accumulation by long-term holders.
This decline mirrors a growing phase of self-custody activity as investors reposition for higher valuations.
Additionally, the strengthening correlation between ETH performance and M2 expansion hints at Ethereum catching up with Bitcoin’s liquidity-led gains.
Consequently, the network appears ready to transition from laggard behavior to a leadership phase in the next liquidity cycle.
Are long-term holders silently building Ethereum’s next bull leg?
Santiment’s Realized Cap HODL Waves show a sharp rise in mid-term holder activity.
The 60–90-day wave surged from 1.9% in mid-June to 10.24% by the 6th of October, while the 30–60-day wave climbed from 1.7% to 4.87% in the same period.
This crossover indicates investors are holding ETH longer, reflecting rising conviction and reduced short-term profit-taking. Historically, such expansions in longer HODL bands have preceded major rallies.
The shift mirrors similar structures seen before Ethereum’s 2020 and 2021 bull runs, suggesting mid-term holders are quietly laying the foundation for another liquidity-driven breakout.
Source: Santiment
Is Ethereum’s cooling sentiment a hidden bullish catalyst?
Ethereum’s social data paints a fascinating picture of growing divergence between crowd behavior and market mood.
Weighted Sentiment was -0.76 at press time, showing cautious investor emotions, while social dominance holds around 5.76%, suggesting steady discussion despite fading optimism.
This disconnect reflects a phase where speculative noise declines and genuine accumulation intensifies.
Historically, such sentiment troughs have preceded strong rebounds once liquidity and confidence return.
Therefore, this cooling sentiment could mark a strategic accumulation window, with Ethereum’s silent majority positioning ahead of the next liquidity surge that could redefine its market trajectory.
Source: Santiment
Short sellers face pressure
The derivatives market reflects growing liquidation pressure on bearish traders. On the 6th of October, short liquidations reached $7.79 million against $4.29 million in longs, showing increasing stress on the former.
This imbalance indicates that bearish traders are being squeezed out as Ethereum maintains stability above $4,500.
Meanwhile, speculative positioning remains elevated across Binance and OKX, hinting at strong bullish sentiment among leveraged participants.
Altogether, Futures data reveals a structural tilt toward upside continuation as funding flows and liquidations align in favor of long positions.
Source: CoinGlass
The start of a new cycle?
Ethereum’s falling exchange reserves, rising mid-term accumulation, and expanding global liquidity confirm strengthening on-chain fundamentals.
Cooling sentiment and steady engagement show a shift from hype to conviction, while short liquidations reflect building market confidence.
Together, these metrics indicate Ethereum’s structure is solidifying, signaling the beginning of a sustained bullish phase that could drive significant upside momentum in the coming months.
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