While Ethereum appears to have started its own major rally, the asset has recently experienced significant activity on the Deribit Options Exchange, raising the question of what this means for the price of ETH.
A CryptoQuant analyst known as Amr Taha detailed these developments in a post on the CryptoQuant QuickTake platform. The analysis focused on substantial outflows from the exchange to cold wallets, highlighting the potential implications for market sentiment and liquidity.
ETH net flows on Deribit and the implications
According to Taha, the Deribit Options Exchange recorded a notable transaction involving the transfer of 233,000 ETH to a cold wallet. The transaction, worth approximately $783 million, was executed at an average price of $3,350 per Ethereum.
This wasn’t limited to Ethereum alone: Bitcoin also witnessed a similar outflow, with 31,000 BTC worth $3.038 billion moved to cold storage. These transfers have led to speculation about the motivations behind such activities and their potential impact on the broader market.
As a result, the CryptoQuant analyst highlighted four key implications of this move. First, the reduction in selling pressure is notable. Assets stored in cold wallets are less likely to be sold immediately, which can reduce liquidity on exchanges.
Taha noted that this scenario could contribute to price stability or even further boost the market’s bullish trend if demand remains stable or increases.
Another important takeaway from these transactions is the possibility of institutional accumulation. Such large-scale transfers often indicate that institutional investors or wealthy individuals have confidence in Ethereum’s long-term value.
Additionally, Taha highlighted Deribit’s strategy to move these funds as part of a risk management approach. The analyst wrote:
Moving assets to cold storage is a security practice to minimize exposure to hacking risks. It also reflects a cautious approach, likely due to regulatory scrutiny or expected market volatility.
Furthermore, Taha highlighted that this move could also impact market sentiment, with traders potentially interpreting these trades as bullish, “which could lead to more buying activity.”
Ethereum Market Performance
Meanwhile, Ethereum is currently trading above $3,300, after rising 8.2% in the past week and 1.3% in the past 24 hours. The asset’s market capitalization has increased significantly in addition to its price, with a current valuation of almost $400 billion.
According to renowned crypto analyst EᴛʜᴇʀNᴀꜱʏᴏɴᴀL on
According to the analyst, “altcoins will follow” as Ethereum continues to rise.
#Ethereum $10k+ step by step!$ETH repeats the bullish megaphone pattern it drew while heading into the 2016-2017 mega bull period, before the 2024-2025 mega bull period.#Alts will follow! pic.twitter.com/VRVI8lwnsS
— EᴛʜᴇʀNᴀꜱʏᴏɴᴀL
(@EtherNasyonaL) November 22, 2024
Featured image created with DALL-E, Chart from TradingView
