Ethereum Breakout Driven by ETF Demand and Supply Squeeze

Ethereum's price surge of 3.5% over the past 48 hours is part of a larger breakout in late August, driven by multiple factors.

One key factor is the significant demand from U.S. spot Ethereum ETFs, which have recorded their largest single-day net inflow in 10 months on August 28, totaling $225.8 million and marking nine straight sessions of net inflows since August 17.

This has led to a supply squeeze, with exchange outflows and staking reducing the available ETH supply. Since June, total exchange reserves have fallen by 18%, from 7.69 million to 6.28 million ETH, while over 42 million ETH are now locked in staking, further reducing liquid supply.

The recent price move is partially driven by the structural supply squeeze and ongoing ETF buying, which has an outsized effect on price due to reduced available supply.