Journalist
Posted:
- Ethereum outflows have increased in recent weeks.
- This happened despite the sideways price movements.
Leading altcoin Ethereum [ETH] has continued to experience a surge in foreign exchange outflows despite recent price action, on-chain data provider IntoTheBlock noted in a recent post on X.
ETH continues to record larger currency outflows, with $380 million leaving the CEXs this week and about $1.5 million this past month pic.twitter.com/WlteNAJssu
— IntoTheBlock (@intotheblock) September 2, 2023
More than $380 million worth of ETH left centralized exchanges last week, according to the data provider. Last month, the total outflow was about $1.5 million.
Read Ethereum’s [ETH] Price Forecast 2023-24
An increase in asset outflows on the exchange is often considered 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 an imbalance between supply and demand and potentially drive up the asset’s price due to increased competition among buyers.
It could also mean that investors are sending their assets to private wallets, increasing their value less readily available for immediate sale. This often results in reduced selling pressure in the market, which can contribute to price stability or upward price movements.
In addition, the high foreign exchange outflows could be due to investors moving their assets into stalking pools. This is highly plausible in the case of ETH, as evidenced by data Dune Analytics revealed that the amount of ETH wagered weekly has increased in recent weeks. In August this increased by 2%.
Source: Dune Analytics
Bitcoin is to blame
Since Bitcoin’s liquidity flush on August 17 [BTC] futures markets, ETH has traded between $1600 and $1700 in a narrow price range. At the time of writing, ETH was switching hands at $1,635.
Is your wallet green? Check out the ETH Profit Calculator
Due to its statistically significant positive correlation with the king coin, deleveraging imposed a bearish condition on ETH as the bears regained control on Aug. 17 and have been putting downward pressure on the price of the alt ever since.
On a D1 chart, ETH’s moving average convergence/divergence (MACD) indicator showed that the MACD line moved below the trendline shortly after the capital exit from the BTC market, as many sold their ETH holdings for fear of a ripple effect.
At the time of writing, the bears still controlled the market among daily ETH traders. According to the coin’s Directional Movement Index, the positive directional index (green) at 14.03 was below the negative directional index (red) at 34.44. This suggested that the strength of the sellers was far greater than that of the buyers.
Similarly, the Average Directional Index (yellow) above 25 at 42.95 indicated a strong downtrend in the market. The price of ETH could fall or stagnate without a change in sentiment.
Source: ETH/USDT on TradingView