A shrinking supply of tradeable ETH meets a wave of new contract activity, setting up a tension that could define the second half of 2026. Exchange reserves are draining at a pace of roughly $25.6 million per week, while new smart contract deployments have jumped approximately 50% above the trailing three-month average. The liquidity drainThe amount of ETH sitting on major exchanges has fallen to multi-year lows, with reports pegging total exchange reserves as low as 16.2 million ETH by mid-2026. AdvertisementStaking now accounts for more than 30% of the total ETH supply. Over 30% of total supply is locked in staking contracts, and those positions tend to be sticky.