2.4 Million Ethereum Anchor: How Binance’s Illiquid Supply Takes February’s ETH Volatility
Ethereum is navigating a period of high volatility and uncertainty as it hovers around the crucial $2,000 threshold. While recent price action suggests temporary stabilization after weeks of selling pressure, the upside remains limited. The $2,000 level serves less as guaranteed support and more as a psychological battleground where short-term positioning, liquidity conditions, and sentiment collide.
The latest analysis from Arab Chain provides more structural insight into ETH Binance Liquid vs. Illiquid Supply Model. This framework separates the Ethereum stored on Binance into a liquid supply – coins that are readily available for trading – and an illiquid supply, which may be too small to move in the short term. As of February, Binance’s total ETH reserves stand at around 3.57 million ETH. Of this amount, approximately 1.16 million ETH are classified as liquid supply, while 2.40 million ETH are classified as illiquid.
This distribution is important. A relatively small liquid portion can limit near-term selling pressure, but it does not eliminate risk if sentiment deteriorates. In contrast, a large illiquid base may reflect long-term behavior or strategic positioning rather than near-term distribution.
At a time when the price is hovering around a key technical pivot, the structure of the exchange’s funds becomes a logical variable in evaluating the next structural movement of Ethereum.
Liquid vs. Illiquid Supply Signals Fragile Equilibrium
The current structure of the depository on Binance suggests that Ethereum is operating within a balanced structure rather than a rapid distribution phase. With the unsanctioned supply of most of the 3.57 million ETH stored on the platform, the majority of coins seem to be quiet. Illiquid balances are often associated with longer holdings or reduced trading frequency, which often alleviates immediate selling pressure.
This is important at a time when ETH is hovering near $2,000. Highly illiquid shares mean that many owners are standing up for quick exits. In previous cycles, sharp increases in liquidity often preceded volatility spikes, as coins were readily available for market use. That flexibility has yet to show up at scale.
In contrast, the supply of liquidity historically increases during speculative phases, when traders circulate capital or prepare for directional exposures. The absence of an announced expansion suggests that, for now, speculative momentum remains contained.
A stable gap between liquid and illiquid supply indicates a balance between holding behavior and active trading. However, this balance is conditional. A sensible switch to a higher fluid supply can increase the chances of renewed flexibility. Conversely, a continued illiquid regime can help absorb price shocks and lower average acceleration.
Ethereum Tests Long-Term Support As Downtrend Accelerates
Ethereum remains under structural pressure as prices are rising near the $2,000 region following a sharp decline from the $3,200–3,400 area. The weekly chart shows a clear loss of the bullish structure, with a lower high forming from the end of the 2025 peak and momentum shifting downwards.
The price is now trading below the 50-week and 100-week moving averages, both of which are starting to flatten or decline. This configuration usually indicates moderate pressure occurring and a transition to a correction phase. Notably, Ethereum briefly tested levels near $1,800 before jumping, suggesting the presence of active demand in that currency. However, recovery remains limited and has yet to recapture key moving averages.
The 200-week moving average, located at the bottom of the chart, remains tilted higher, indicating that the broader macro trend has not completely reversed. Historically, this level has served as a strong structural support during deep cycle corrections. If downside pressure resumes, this area could be an important area to watch.
Volume expanded significantly during the recent selloff, indicating a forced stoppage correction rather than a gradual spread. Since then, the activity has dominated, indicating temporary stability.
Featured image from ChatGPT, chart from TradingView.com
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