Ethereum Exchange Inflows Climb To 4-Month High – What This Means For Price
Over the past week, the Ethereum price declined significantly, following Bitcoin’s downturn towards $59,000. As the second-largest cryptocurrency’s price dropped to $1,505, data from a recent on-chain analysis reveal an underlying shift in activity across exchanges. 24 million in a single day.
According to Arab Chain, this marks the highest point reached in the past four months. For context, the metric measures the total amount of ETH transferred to all tracked cryptocurrency exchanges over a given period, helping gauge potential selling pressure as coins move to trading platforms. When inflows are high, it suggests that a large amount of ETH may be being prepared for sale.
As Arab Chain notes, when large volumes of Ethereum are moved to trading platforms, it is usually taken as a bearish signal or an incoming surge in trading activity (which could translate into heightened volatility). This is because growing inflows indicate that there is more available supply for distribution than in the past. Related Reading: Dogecoin Has Entered A Historically Red Month And The Result Could Be Catastrophic Binance Leads Exchanges In Inflow Volume Notably, Arab Chain points out that Binance, the world’s leading crypto exchange by trading volume, had the lion’s share of Ethereum inflows.
24 million ETH were sent to all exchanges. Interestingly, the surge in exchange inflows reportedly followed a period of relative stability in deposit activity. Thus, Arab Chain explains that this sudden surge — after periods of quiet — becomes more important than other previous events.
According to the crypto group, this may signal that Ethereum’s investors are preparing to take profits or restructuring their portfolios. However, Arab Chain notes that high inflows are not a surefire indicator of bear markets. Nonetheless, they remain highly relevant considering Ethereum’s price weakness.
According to Arab Chain, sustained high inflows of Ethereum into exchanges (with an emphasis on Binance) could intensify selling pressure and trigger a further downturn for the second-largest cryptocurrency in the near term. At the time of writing, the Ethereum price is at $1,577. 35% over the past day.
Featured image from Pexels, chart from Tradingview
