Ethereum Deposits At 4-Month High: Whales Preparing For Selloff?
May 28 2024 - 12:30PM
NEWSBTC
On-chain data shows that the Ethereum exchange netflow recently
spiked significantly, a sign that could be bearish for the
cryptocurrency’s price. Ethereum Exchange Netflow Registered A
Large Positive Spike Recently In a new post on X, the market
intelligence platform IntoTheBlock has discussed about the latest
trend that has been occurring in the exchange netflow metric for
Ethereum. The “exchange netflow” here refers to an on-chain
indicator that tracks the net amount of any given cryptocurrency
entering into or exiting the wallets associated with centralized
exchanges. Related Reading: Injective (INJ) Buy Signal That Led To
700% & 555% Rallies Forms Again When this metric’s value is
positive, it means that investors are depositing a net number of
tokens on these platforms right now. Generally, one of the main
reasons holders may transfer to the exchanges is for
selling-related purposes, so this trend can have bearish
implications for the asset’s price. On the other hand, the negative
indicator implies the exchanges are currently bleeding supply as
outflows are outpacing the inflows. Such a trend may be a sign that
the investors are accumulating, which can naturally be bullish for
the coin. Now, here is a chart that shows the trend in the Ethereum
exchange netflow since the start of the year 2024: The graph shows
that the Ethereum exchange netflow has registered a positive spike
recently. At the height of this spike, the exchanges received
140,660 ETH in net deposits. At the current price of the
cryptocurrency, this amount is equivalent to almost $547 million.
This is a huge amount and the largest net deposit spree these
central entities have witnessed since January. “High inflows to
exchanges are typically a sign of selling behavior, as people
either try to claim profits or succumb to FUD,” notes the analytics
firm. Interestingly, though, since these deposits have come, the
asset’s price has increased. This could suggest that either the
whales making the inflows haven’t pulled the trigger on selling
these coins yet, or they never planned to sell to begin with. Of
course, it’s also possible that the market demand has been able to
absorb the selling if the whales have indeed sold. In the scenario
where the whales made the deposits with the intention of selling
but haven’t made the trade yet, Ethereum could feel a bearish
effect. Related Reading: Altcoin Season Soon? Quant Says This
Ethereum Pattern Could Suggest So It now remains to be seen how the
cryptocurrency’s price will develop in the coming days and if these
large deposits will play any visible role at all. ETH Price
Ethereum had seen a pullback earlier, but the asset has managed to
make a recovery, as its price is now once again floating above the
$3,900 mark. Featured image from Dall-E, IntoTheBlock.com, chart
from TradingView.com
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