In the past week, Ethereum (ETH) experienced a significant decrease in outflow from exchanges, coinciding with a bullish price trend. However, the market sentiment shifted to bearish in the last 24 hours. Has this downturn affected ETH's outflow negatively?
Ethereum Outflow Surges as Price Tops $3,000: Investors Anticipate Further Gains
There has been a surge in Ethereum's outflow, coinciding with its price comfortably surpassing the $3,000 mark and rallying by over 6% in the last seven days.
During this period, investors demonstrated a trend of accumulating ETH, indicating their anticipation of further price appreciation in the near future. Notably, popular crypto analyst Titan of Crypto recently highlighted this accumulation trend in a tweet.
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According to the tweet, crypto exchanges experienced an outflow of more than 260,000 ETH, totaling over $781 million, within the past seven days.
Furthermore, notable figure Justin Sun was observed accumulating ETH as well. According to a recent tweet from Lookonchain, a wallet potentially belonging to Sun withdrew 15,389 ETH, valued at $49.78 million, from Binance.
This wallet had previously purchased 147,442 ETH, amounting to $469.9 million at a price of $3,179 since April 8th.
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However, the market sentiment shifted in the last 24 hours, with most cryptocurrencies experiencing price declines. CoinMarketCap reported that ETH was down by over 2% during this period.
At the time of reporting, the leading altcoin was trading at $3,165.53, with a market capitalization exceeding $386 billion.
Analyzing ETH's Price Drop: Are Investors Selling Off?
Has the recent drop in ETH's price affected buying pressure? To address this question, AMBCrypto conducted an analysis of the token's metrics.
According to our examination of CryptoQuant's data, ETH's net deposit on exchanges was notably higher compared to the average of the last seven days. This suggests that investors have begun to offload their ETH holdings.
Moreover, there has been a decline in the token's exchange outflow in recent days. Additionally, the increase in Ethereum's supply-on-exchange graph further supports the notion that investors are selling their Ethereum holdings.
Source: Santiment
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Interestingly, despite the price decline, there has been no apparent impact on whale accumulation. This observation is evidenced by the continuous rise in the supply of ETH held by top addresses throughout the previous week.
Will ETH Prices Keep Dropping?
Following this, an analysis of ETH's derivatives metrics and technical indicators was conducted to determine if the rise in selling pressure could further impact its price. It was observed that the token’s Funding Rate increased.
Source: Santiment
Traditionally, prices are inclined to move inversely to the Funding Rate. This movement suggested a potential continuation of the price drop for ETH.
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Source: AMBCrypto on TradingView
Furthermore, a bearish outlook was revealed by the analysis of technical indicators. Specifically, both ETH's Chaikin Money Flow (CMF) and Money Flow Index (MFI) were observed to have started to decline, indicating a sustained price drop in the days ahead.
See more: Cryptocurrency Prices and Market Cap
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