- Ethereum’s leverage reset supports a $6,000–$7,000 target if demand continues rising.
- Over 40% of ETH supply is locked in staking, ETFs and treasuries, tightening liquidity.
- Ethereum Foundation’s Morpho deposit shows rising institutional confidence in DeFi.
Ethereum (ETH) is trading at 3,948 at the time of writing, which is 19.9% below its August 2025 all-time high of 4,953. According to on-chain analysts Taylor.eth, over 40% of ETH is currently locked, creating a tighter market supply.
According to the chart shared, 3.4% is held in the form of decentralized asset treasuries, 7.3% is in spot ETFs, and about 29.5% is staked within validator contracts. The combination of these pools decreases liquidity, making this cycle structurally different from past cycles.
Furthermore, there is still an increase in institutional involvement. In treasuries, public companies now hold over 4 million ETH, and spot ETFs manage nearly 9 million, compared to 2.5 million in 2024. The staked supply accounts for almost 30% of the total network, which will sustain the yield income and limit the number of coins that can be traded.
Exchange metrics also support this trend. According to CryptoQuant data, the exchange supply ratio of Binance is close to 0.033, the lowest in a few months. The transfer of ETH from exchanges to self-custody or staking by investors decreases liquidity. In the past, these drops in exchange balances have been accompanied by accumulating and subsequent growth in prices.
Ethereum Shows Technical Strength as Open Interest Falls
Analyst CryptoBullet draws parallels between the structure of Ethereum in 2025 and the breakout of Bitcoin in 2024. His analysis presents a falling wedge, with resistance around $4,600-$4,800 and support around $3,200-$3,400. An actual breakout above the upper band could lead to breakout prices in $6,000-$7,000 range, similar to Bitcoin’s previous experience.
In addition, market pundit Ted Pillows notes that Ethereum open interest has dropped to its lowest point since July 2025, as prices struggle to stay above $4,000. According to Coinglass data, the open interest is at $46 billion, compared to more than $60 billion in early September.
The funding rates are also neutral, and the ratio of long to short positions is in balance. This is a sign that the market has cleared over-leverage and is returning to equilibrium, which in many cases is a precursor to sustainable growth.
Ethereum Foundation Deposits 2,400 ETH Into Morpho Vaults
Meanwhile, the Ethereum Foundation has announced the deposit of 2,400 ETH and approximately $6 million worth of stablecoins into the yield vaults of Morpho. This move indicates an increase in trust in DeFi infrastructure and risk control within permissionless systems.
Morpho is an open-source protocol that enhances lending efficiency by directly pairing borrowers and lenders, thereby narrowing interest-rate spreads. With the present price, the ETH holding is worth in the eight figures, and this is one of the largest DeFi exposures of the foundation. Both ETH and stablecoins are yield diversifiers, with ETH having the potential for appreciation, and stablecoins having consistent revenue in the lateral markets.
The foundation also highlighted Morphois’ commitment to open-source. MetaMorpho and Vault v2 are licensed under the GPL-2.0 license, and Morpho Blue (v1) will switch to the GPL-2.0 license on January 1, 2026. The FLOSS licenses will enable builders to fork and audit the code, thereby increasing the transparency and resilience of DeFi.
Also Read: Ethereum Price Prediction: Could Institutional Buying Drive Ethereum to $10K?
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