Ethereum
Ethereum deposits at their highest in 4 months: whales preparing for the sale?
On-chain data shows that Ethereum exchange net flow has increased significantly recently, a sign that could be bearish for the cryptocurrency’s price.
Ethereum Exchange Netflow recently saw a significant positive spike
In a new job On X, market information platform IntoTheBlock discussed the latest trend that occurred in the Net Exchange Flow metric for Ethereum.
THE “net exchange flow“here refers to an on-chain indicator that tracks the net amount of any given cryptocurrency entering or exiting wallets associated with centralized exchanges.
When the value of this metric is positive, it means that investors are currently depositing a net number of tokens on these platforms. Typically, one of the primary reasons holders may transfer to exchanges is for sales purposes. This trend can therefore have bearish implications on the price of the asset.
On the other hand, the negative indicator implies that exchanges are currently bleeding supply, as outflows exceed inflows. Such a trend may be a sign that investors are accumulatewhich can naturally be bullish for the coin.
Here is now a graph that shows the trend in the net flow of the Ethereum exchange since the start of 2024:
The chart shows that the Ethereum exchange’s net flow saw a positive spike recently. At the height of this peak, 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 wave of net deposits these central entities have seen since January.
“High inflows to exchanges are usually a sign of selling behavior, as people attempt to claim profits or succumb to FUD,” notes the analytics firm. However, it is interesting to note that since these deposits were made, the price of the asset has increased.
This could suggest that either the whales inbounds haven’t yet pulled the trigger on selling these coins, or they never planned to sell in the first place. Of course, it is also possible that market demand could have absorbed the sales if the whales actually sold.
In the scenario where the whales have made the deposits with the intention of selling but have not yet completed the transaction, Ethereum could feel a bearish effect.
It now remains to be seen how the price of the cryptocurrency will develop in the coming days and whether these large deposits will play a visible role.
ETH Price
Ethereum had seen a pullback earlier, but the asset managed to recover as its price is now floating above the $3,900 mark again.
Featured image of Dall-E, IntoTheBlock.com, chart from TradingView.com