According to on-chain data, around 200k ETH entered exchanges yesterday, a sign that Ethereum might face more downside soon.
Central Exchanges Observe Inflow Of 200k ETH
As pointed out by a CryptoQuant post, more than 200k ETH entered exchange wallets yesterday. At the current rate, this amount is worth about $839 million.
The relevant on-chain indicator here is the Ethereum netflow, which shows the net amount of the crypto entering or exiting central exchanges. Its value is calculated by taking the difference between the inflows and the outflows.
When the metric has negative values, it means outflows are dominating the inflows. That is, investors are withdrawing more ETH than they are depositing. Such a trend is usually bullish for the crypto.
On the other hand, positive netflows imply exchanges are receiving a higher amount of Ethereum compared to what’s being taken off. As investors usually transfer their coins to exchanges either for withdrawing to fiat or for purchasing altcoins, prolonged positive values of the indicator can be bearish.
Now, here is a chart that shows the trend in the ETH netflow indicator over the past couple of weeks:
Looks like the indicator has shown a positive spike recently | Source: CryptoQuant
As the above graph shows, a huge positive netflow spike was seen yesterday as around 201k ETH entered exchange wallets.
This is a significant amount of Ethereum, and as is visible in the chart, no inflows of close to this level have been seen during the period.
By the way, one interesting feature in the graph are the humongous outflow spikes from about a week ago. These outflows amounted to around $9 billion in ETH exiting exchanges in just a matter of three days.
The inflow seen yesterday can cause a decline in the price of the crypto in the short term. However, in the long term, signs for the coin are still bullish as the exchange reserves have been sharply dropping off recently.
At the time of writing, ETH’s price floats around $4.2k, down 10% in the last seven days. Over the past month, the crypto has gained 4% in value.
The below chart shows the trend in the price of Ethereum over the last five days.
ETH's price has moved mostly sideways in the last few days | Source: ETHUSD on TradingView
Since Ethereum made a new all-time high above $4.8k, the price has mostly seen a trend of decline. Earlier the price dropped down to as low as 3.9k, before recovering to the current levels.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com