- Ethereum’s exchange outflows have increased in the past few weeks.
- This has occurred despite its sideways price movements.
Leading altcoin Ethereum [ETH] has continued to experience a surge in exchange outflows, despite recent price action, on-chain data provider IntoTheBlock noted in a recent post on X.
ETH continues to record more significant exchange outflows, with $380M leaving CEXs this week and approximately $1.5M this past month pic.twitter.com/WlteNAJssu
— IntoTheBlock (@intotheblock) September 2, 2023
According to the data provider, over $380 million worth of ETH left centralized exchanges last week. Over the past month, the total outflow has been around $1.5 million.
Read Ethereum’s [ETH] Price Prediction 2023-24
An uptick in an asset’s exchange outflows is often considered to be a bullish signal, as it suggests a reduction in the amount of that asset available for trading on exchanges. This reduction in supply can create a supply-demand imbalance and potentially drive up the asset’s price due to increased competition among buyers.
Also, it could mean that investors are sending their holdings to private wallets, making them less readily available for immediate selling. This often results in reduced selling pressure on the market, which can contribute to price stability or upward price movements.
Moreover, high exchange outflows could be because investors are moving their holdings to stalking pools. This is very plausible in ETH’s case, as data from Dune Analytics revealed that the amount of weekly staked ETH has climbed in the past few weeks. In August, this rose by 2%.
Source: Dune Analytics
Bitcoin is to blame
Since the 17 August liquidity flush from Bitcoin’s [BTC] futures markets, ETH has traded between $1600 and $1700 in a narrow price range. At press time, ETH exchanged hands at $1,635.
Is your portfolio green? Check out the ETH Profit Calculator
Due to its statistically significant positive correlation with the king coin, the deleveraging event foisted a bearish condition on ETH as the bears regained control on 17 August and have since put downward pressure on the alt’s price.
On a D1 chart, ETH’s Moving average convergence/divergence (MACD) indicator showed that the MACD line crossed below the trend line soon after the capital exit from the BTC market, as many sold off their ETH holdings in fear of a ripple effect.
At press time, the bears remained in control of the market amongst ETH daily traders. According to the coin’s Directional Movement Index, the positive directional index (green) at 14.03 was positioned below the negative directional index (red) at 34.44. This suggested that the sellers’ strength was solidly above the buyers.
Likewise, the Average Directional Index (yellow) above 25 at 42.95 indicated a strong downward market trend. ETH’s price might dwindle or remain stagnant without a change in sentiment.
Source: ETH/USDT on TradingView
Credit: Source link
