According to on-chain data, exchanges reported Ethereum outflows exceeding 100k ETH yesterday. Here’s what it may mean for the coin’s price.
Today, more than 100,000 Ethereum Exchanges
According to a CryptoQuant analyst, netflows experienced a sharp decline yesterday due to more than 100k Eth leaving exchange wallets.
The “netflow” is an indicator that reveals the net movement of coins moving out of or into exchange wallets. This indicator is calculated using the difference of the outflows & inflows.
If the metric shows positive values it indicates that there are coins being moved into exchange wallets. This trend could indicate that investors are becoming bearish about crypto because they send coins to their wallets in order to sell on exchanges.
Conversely, red values are when investors withdraw a net sum of coins. The indicator’s negative values would indicate that holders are bullish about Ethereum.
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Here’s a chart showing the change in the value the ETH exchanges netflow during the last fifteen days.
Source: CryptoQuant| Source: CryptoQuant
The graph above shows that around 103k ETH were withdrawn yesterday from the exchanges. The Ethereum equivalent of this sum is $490 million at the current rate.
Here’s what an analyst believes this trend might suggest. First, it is bullish for the long term because this suggests that big investors like institutions are interested in buying the stock at the current levels of price.
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Second, the trend may be either bearish or neutral in the near term. Because the outflow was caused by a whale buying, this quant believes that buying could continue for the foreseeable future. This would lead to possible price drops.
At the time of writing, Ethereum’s price floats around $4.7k, up 0.1% in the last seven days. The coin’s gains have been 20% over the last 30 days.
The chart below shows how ETH prices have changed over the course of the last five business days.
Source: ETHUSD on TradingView| Source: ETHUSD on TradingView
Ethereum’s volatility has been high over the past few days as its price fluctuated between $4.8k to $4.5k several times.
ETH appears to be recovering from the cryptocurrency crash. This happened after crypto reached a record high. However, if volatility keeps up, it’s hard to say if this recovery would stand for too long.
Unsplash.com's featured image. Charts by TradingView.com. CryptoQuant.com chart.