Over the past week, the price of Ethereum fell significantly, following Bitcoin’s decline towards $59,000. While the price of the second largest cryptocurrency fell to $1,505, data from a recent on-chain analysis shows an underlying shift in activity between exchanges.
Ethereum Exchange inflows rise to 2.24 million per day
In one Quicktake post on June 6, on-chain analytics group Arab Chain cited data from the ‘Ethereum: Exchange Inflow (Total) – All Exchanges’ metric, noting that inflows across all platforms recently reached 2.24 million in one day. According to Arab Chain, this is the highest point reached in the past four months.
For context, the metric measures the total amount of ETH transferred to all tracked cryptocurrency exchanges over a given period, allowing for the measurement of potential selling pressure as coins move to trading platforms. When inflows are high, it indicates that a large amount of ETH may be being prepared for sale.
As Arab Chain notes, when large volumes of Ethereum are moved onto trading platforms, it is usually interpreted as a bearish signal or an incoming surge in trading activity (which could translate into increased volatility). This is because the growing influx indicates that there is more supply available for distribution than in the past.
Binance leads exchanges in inflow volume
In particular, Arab Chain points out that Binance, the world’s largest crypto exchange by trading volume, accounted for the lion’s share of Ethereum inflows. According to the analytics group, Binance saw over 1.16 million ETH inflows on the same day, while a total of 2.24 million ETH was sent to all exchanges.
Interestingly, the increase in currency inflows reportedly followed a period of relative stability in deposit activity. Arab Chain thus explains that this sudden wave – after periods of calm – becomes more important than other previous events. According to the crypto group, this could be a signal that Ethereum investors are preparing to take profits or restructure their portfolios.
However, Arab Chain notes that high inflows are not a foolproof indicator of bear markets. Nevertheless, they remain highly relevant given Ethereum’s price weakness. According to Arab Chain, continued high Ethereum inflows into exchanges (with an emphasis on Binance) could intensify selling pressure and trigger a further downturn for the second-largest cryptocurrency in the short term.
At the time of writing, the price of Ethereum is $1,577. According to data from CoinMarketCap, Ethereum price has fallen 5.35% over the past day.