The Ethereum exchange has seen an increase in its daily transactions for much of the week. These inflows averaged over $1 billion per day, which is consistent with the current sell-off trend. It seems that the tide is turning. The weekend is drawing to a close and exchange inflows continue to decline. This suggests that sellers may be entering a period of cooling off that could possibly alter the price movement.
The Inflows Drop Below $1 Billion
Alarming inflows to exchanges this week were the norm. While the outflows have been sufficient to offset the problem, investors moving Ethereum to exchanges at an alarming rate was alarming. Ethereum was able to see $5.2 million flowing in one day. Its peak value rivaled that of bitcoin.
Related reading: Experts Forecast Ethereum to Grow 100% and Reach $5,783 Year-End| Experts Say Ethereum Will Grow 100% To Hit $5,783 By Year-End
The trend continued for several days, with inflows lower than the peak but still above $1 billion. This was until midweek, when exchange inflows dropped significantly to below $1 billion.
Over the past 24 hour, the amount of ETH entering exchanges has dropped to $880 million. It is clear that the sellers have stopped circulating coins on the exchanges.
📊Daily on-Chain Exchange Flow#Bitcoin $BTC
➡️Invoices up to $1.5B
⬅️$1,6B
📉 Net flow: -$112.5M#Ethereum $ETH
➡️In: $880.5M
⬅️$1781.0M
📈 Net flow: +$99.5M#Tether (ERC20) $USDT
➡️In: $663.4M
⬅️$6411.6M
📈 Net flow: +$21.8Mhttps://t.co/dk2HbGwhVw— glassnode alerts (@glassnodealerts) May 5, 2022
However, massive outflows offset these inflows. The investors’ accumulation frenzy was sufficient to stop sellers trying to lower the price. However, this did not happen for the past 24 hours because outflows were $99.5 million higher than inflows.
Is Ethereum going to follow?
Ahead of the opening of the trading day on Thursday, Ethereum’s price has not been doing well on the charts. There have been a few dips, which has brought it closer to the $2900 mark. The trend is being followed by the crypto market, but it isn’t doing well for the digital asset itself.
Source: ETHUSD on TradingView.com| Source: ETHUSD on TradingView.com
Ethereum’s short-term trends are one area where it continues to fail. The current price is trading below its 50-day moving mean, which is a crucial point to keep in mind if Ethereum is going to show a bullish trend over the near term. Although the current price is not below that range by much, it is sufficient to raise questions about whether there is enough momentum to support a recovery over the next few days.
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The $2,824 level is the next important support level for digital assets. If bears can beat it down above $2,900 today, further drops are likely before the cryptocurrency is able find sufficient support.
However, $3,015, which is the initial major resistance, seems to be the opposite. It has been clear that falling below $2,800 is more difficult than reaching $3,000, which it has done in recent days.
Featured image taken from Token Information chart at TradingView.com