Ethereum Faces More Losses as Spot Demand Weakens

• Binance ETH reserves fell to 3.47 million, an 11.5% decline from August’s 3.92 million, as withdrawals exceeded 320,000 transactions on Oct. 6.
• Ted Pillows highlights $5 billion in ETH short positions versus $1.53 billion in longs, while weakening spot demand raises correction risks.
• ETH recovered toward $2,500 after falling to 2,420–2,450, with support near $2,450 and resistance at $2,600 and $2,700.

Ethereum faces further correction risks as weakening spot demand offsets falling exchange reserves and heavy short positioning, according to analysts Ted Pillows and Darkfost. Binance ETH reserves have dropped to a six-month low, while withdrawals reached a record daily level. Meanwhile, market data shows ETH struggling near $2,500 after a sharp October decline.

Binance ETH Reserves Fall to Six-Month Low

Darkfost reported that Binance’s ETH reserves fell from 3.57 million to 3.47 million over three days. In August, reserves stood at 3.92 million ETH, marking a decline of nearly 11.5%.

https://twitter.com/Darkfost_Coc/status/2108264277614178500?s=20

Withdrawals also surged, with Binance recording more than 320,000 withdrawal transactions on Oct. 6. Darkfost said investors continued moving ETH off the exchange despite falling prices, potentially indicating longer-term holding or plans to use their assets.

The wider market correction has also hit Ethereum. Total2, which tracks the market capitalization of altcoins, lost more than $110 billion over three days. Meanwhile, ETH fell 11%, wiping more than $38 billion from its market capitalization.

Weak Spot Demand and Short Positions

Ted Pillows said most downside liquidity for ETH had been taken out for now. However, he pointed to approximately $5 billion in short positions against $1.53 billion in longs.

Despite that imbalance, Pillows identified weakening spot demand as a concern. He said reduced demand could leave Ethereum vulnerable to another correction, even after the recent liquidity sweep.

ETH Price Struggles to Recover Above $2,500

The spot inflow and outflow chart shows ETH falling from around $2,700 on Oct. 6–7 toward $2,550. The price subsequently dropped to approximately 2,420–2,450 on Oct. 8 before recovering toward $2,500 by Oct. 11.

Source: Coinglass

Flow data recorded positive inflows near $80 million to $100 million around Oct. 1–5. However, outflows intensified on Oct. 6–7, including a negative spike near $150 million on Oct. 7.

After Oct. 8, netflows moved closer to zero, with occasional positive readings of 10 million–30 million. ETH now faces support around 2,450–2,500, while $2,600 and $2,700 remain overhead resistance levels.