The Ethereum netflow chart shows that the spike in exchange flows often comes when the price of ETH is trading at a short-term or long-term low.
The exchange netflow of Ether (ETH) over the past couple of years highlights a behavioral pattern among Ether whales that market analysts believe is done to pump the price of the second-largest cryptocurrency.
The “exchange netflow” is an indicator that measures the net amount of cryptocurrency entering or exiting the wallets of all centralized exchanges. The metric’s value is calculated by taking the difference between exchange inflows and exchange outflows.
Data shared by a pseudonymous trader at crypto analytic firm CryptoQuant indicates that ETH whales have consistently sent their holdings onto exchanges to raise the price of ETH and sell it at a higher market price.
The Ether exchange netflow data confirms the behavioral pattern among ETH whales and indicates it has been persistent since 2020. The price pump is often followed by whales selling their holdings at an increased market price, which itself preceeds a correction, as is visible in the chart below.
The behavioral pattern comes as a surprise given that a positive netflow or a rise in the number of deposits on centralized exchanges is often viewed as a bearish signal, as traders mostly send their holdings onto exchanges to sell.
In their analysis, the trader noted that the exchange deposits increased periodically during short-term or long-term lows for the asset. The netflow chart confirms that the spike in exchange flows has often come at a time when the price of ETH has been trading at lower levels.
Related: Ethereum Merge spikes block creation with a faster average block time
Ether whales’ heavy deposits onto exchanges continued even in the run-up to the Merge as the price of ETH rallied prior to the key proof-of-stake transition. The price dipped after the Merge, despite numerous market pundits predicting it would perform otherwise, thus confirming the behavioral pattern associated with Ether whales’ exchange deposits. The trader concluded, however, that exchange inflow does not necessarily rise before Ether prices rise.
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October 04, 2022 at 05:15PM
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Ether exchange netflow highlights behavioral pattern of ETH whales - Cointelegraph
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