Summary

• Ethereum’s Supply on Exchanges increased in the last few days. 
• ETH was down by over 2%, and indicators looked bearish

ETH

Over the past week, Ethereum (ETH) has experienced a significant outflow from exchanges, coinciding with a bullish price action. However, in the last 24 hours, the market sentiment turned bearish. Did this downturn have a negative impact on ETH’s outflow?

The notable decrease in ETH held on exchanges over the past week suggests a growing trend of investors moving their ETH off trading platforms, possibly to long-term storage or decentralized finance (DeFi) platforms. This movement often indicates increased confidence in the asset’s long-term prospects and reduced selling pressure.

During this period of bullish price action, Ethereum’s value surged, reflecting positive sentiment and investor optimism. However, the recent shift in market sentiment towards bearishness, observed over the last 24 hours, has led to a downturn in prices.

Now, the question arises: how did this bearish turn impact the outflow of ETH from exchanges? Historically, during market downturns, investors tend to adopt a more cautious approach, either holding onto their assets or moving them back to exchanges for trading purposes. This behavior could potentially lead to a decrease in outflows from exchanges as investors become less inclined to transfer their ETH to external wallets or DeFi platforms.

In summary, while Ethereum experienced a notable outflow from exchanges during its bullish run, the recent shift in market sentiment towards bearishness may have influenced investor behavior, potentially leading to a decrease in ETH outflow as investors reassess their strategies amidst market uncertainty.

Ethereum’s outflow surged!

Ethereum maintained a strong position above the $3,000 threshold, experiencing a notable surge of over 6% in value over the past week. This upward movement prompted investors to increase their holdings of ETH, suggesting optimism about its potential for further price appreciation in the near future.

Notably, prominent crypto analyst Titan of Crypto underscored this trend in a recent tweet. According to their observation, cryptocurrency exchanges saw a significant outflow of more than 260,000 ETH, amounting to approximately $781 million, within the preceding seven-day period.

Moreover, Justin Sun, a well-known figure in the crypto space, joined the ranks of ETH accumulators. A wallet purportedly associated with Sun withdrew 15,389 ETH valued at $49.78 million from Binance, as reported by Lookonchain via Twitter. This move followed a previous acquisition by the same wallet, which had purchased 147,442 ETH worth $469.9 million at an average price of $3,179 since April 8th.

However, market sentiment took a downturn in the last 24 hours, leading to a widespread decline in cryptocurrency prices. According to data from CoinMarketCap, ETH experienced a decrease of over 2%.

As of the current moment, Ethereum, often regarded as the leading alternative to Bitcoin, was trading at $3,165.53, boasting a market capitalization exceeding $386 billion.

Is ETH’s price drop affecting buying pressure?

Following the recent decline in the token’s price, AMBCrypto conducted a thorough examination of its metrics to assess any potential impact on buying pressure.

Our analysis of data from CryptoQuant unveiled that Ethereum’s net deposits on exchanges were notably elevated compared to the average of the previous seven days. This indicated a shift in investor behavior towards selling ETH.

Moreover, there was a decrease in the token’s exchange outflow in recent days. Furthermore, the rise in Ethereum’s supply-on-exchange graph provided additional evidence of investors divesting their holdings.

Interestingly, despite the price downturn, there was no apparent slowdown in whale accumulation. This observation was supported by the continuous increase in ETH supply held by top addresses throughout the past week.

Going forward

Subsequently, AMBCrypto delved into Ethereum’s derivatives metrics and technical indicators to assess the potential impact of the heightened selling pressure on its price dynamics. One notable observation was the increase in the token’s Funding Rate, a metric often indicative of market sentiment among derivatives traders.

Historically, there has been an inverse correlation between prices and the Funding Rate. This observed trend hinted at the likelihood of a sustained downward trajectory for ETH’s price. Additionally, Atheneum’s Funding Rate registered a notable elevation during this period, as reported by Santiment.

Furthermore, a bearish outlook was reinforced by technical indicators. Notably, both Ethereum’s Chaikin Money Flow (CMF) and Money Flow Index (MFI) displayed a downward trend, signaling a potential continuation of the price decline in the days ahead.