On-chain data shows that ethereum exchange net flow recently increased significantly, a sign that could be bearish for the cryptocurrency's price.
ethereum Exchange Netflow Recorded a Large Positive Spike Recently
in a new x.com/intotheblock/status/1795367087487013180″ target=”_blank” rel=”nofollow”>mail On x, market intelligence platform IntoTheBlock has discussed the latest trend that has been occurring in the net exchange flow metric for ethereum.
“Net exchange flow” here refers to an on-chain indicator that tracks the net amount of any given cryptocurrency flowing into or out of wallets associated with centralized exchanges.
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When the value of this metric is positive, it means that investors are depositing a net amount of tokens on these platforms right now. Generally, one of the main reasons why holders can transfer to exchanges is for selling-related purposes, so this trend can have bearish implications for the price of the asset.
On the other hand, the negative indicator implies that stock markets are currently losing supply as outflows are outpacing inflows. This trend may be a sign that investors are accumulating, which can naturally be bullish for the coin.
Now, here is a graph showing the trend in the net flow of the ethereum exchange since the beginning of the year 2024:
The chart shows that the ethereum exchange net flow has recorded a positive spike recently. At the height of this spike, 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 into stock markets are often a sign of selling behavior, as people try to claim profits or succumb to FUD,” the analytics firm notes. Interestingly, however, since these deposits arrived, the price of the asset has increased.
This could suggest that the whales making entries haven't pulled the trigger on selling these coins yet, or that they never planned to sell them to begin with. Of course, it is also possible that market demand could have absorbed the sales if the whales have actually sold out.
In the scenario where the whales made the deposits with the intention of selling but have not yet completed the transaction, ethereum could feel a bearish effect.
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It now remains to be seen how the price of the cryptocurrency will evolve in the coming days and whether these large deposits will play any visible role.
eth Price
ethereum had previously seen a pullback, but the asset managed to recover as its price is now floating back above the $3,900 mark.
Dall-E Featured Image, IntoTheBlock.com, TradingView.com Chart
