HomeCryptocurrencyEthereum Exchange Inflows Highest Since March: Bearish Sign?

Ethereum Exchange Inflows Highest Since March: Bearish Sign?

-


On-chain data shows that the Ethereum exchange net flows have been highly positive recently, a sign that selling may be taking place in the market.

Ethereum Exchange Netflows Have Seen A Spike Recently

In a new post on X, CryptoQuant head of research Julio Moreno discussed the latest trend in Ethereum’s exchange netflow. The “exchange netflow” here refers to an on-chain metric that keeps track of the net amount of ETH moving into or out of the wallets of all centralized exchanges.

When this metric’s value is positive, it means that these platforms are receiving a net number of coins right now. As one of the main reasons holders might deposit coins to exchanges is for selling-related purposes, this trend can potentially bearish consequences for the asset’s price.

On the other hand, the indicator’s negative reading implies that exchange-associated wallets are observing net withdrawals currently. Investors may be moving their coins away from the custody of these central entities for long-term holding, so such a trend may prove to be bullish for the cryptocurrency.

Now, here is a chart that shows the trend in the Ethereum exchange netflow over the last few months:

The value of the metric appears to have been quite high in recent days | Source: @jjcmoreno on X

The above graph shows that the Ethereum exchange netflow has registered some large positive spikes recently. These net deposits have been of a scale only observed in March. According to Moreno, these deposits have mostly been headed towards Binance and Bybit.

As mentioned before, net exchange inflows can indicate that selling is taking place in the market, although this doesn’t necessarily have to be the case. Sometimes, large deposits use one of the other services these platforms provide, like derivatives contracts.

Whatever the case, though, volatility does tend to rise following large deposits. The chart shows that the rally top back in March saw the indicator assume high values as investors participated in profit-taking.

Recently, Ethereum has observed a sharp surge, fueled by positive news surrounding the spot exchange-traded funds (ETFs). Given this rally, it’s possible that profit-taking may once again be the goal behind the positive net flows.

So far, though, ETH has managed to stave off this potential selloff, as its price has remained relatively high. It’s uncertain, however, how long demand can continue to absorb the possible selling pressure if deposits continue to flow into these platforms in the coming days.

ETH Price

Ethereum started a move up during the past day as its price breached the $3,950 mark. The rise only lasted briefly, though, as the asset returned below the $3,800 level.

Ethereum Price Chart

Looks like the price of the asset has observed a surge over the last few days | Source: ETHUSD on TradingView

Featured image from Kanchanara on Unsplash.com, CryptoQuant.com, chart from TradingView.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here

LATEST POSTS

Winklevoss Twins Donate $2 Million in Bitcoin to Donald Trump

Tyler and Cameron Winklevoss, co-founders of cryptocurrency exchange Gemini, have donated 30.94 Bitcoin, valued at over $2 million, to former President Donald Trump's campaign....

Marathon Uses Bitcoin Mining To Heat Town of 11,000 in Finland

Today, Marathon Digital Holdings, Inc. (NASDAQ: MARA), a leader in Bitcoin mining, has launched an innovative pilot project to recycle heat generated from Bitcoin...

Why Broadcom’s (AVGO) 10-for-1 Stock Split Could Attract a New Wave of Investors

Broadcom Inc. (AVGO), a prominent player in the semiconductor industry, announced a 10-for-1 forward stock split set to take effect on July 15, 2024,...

5 Best Cheap Crypto to Buy Now Under 1 Dollar June 20 – Flow, polygon, Hedera, Gala

Join Our Telegram channel to stay up to date on breaking news coverage The crypto market experienced substantial fluctuations in June due to sentiment surrounding...

Most Popular