- Ethereum’s forex outflows have increased over the past few weeks.
- This happened despite the sideways price action.
Leading Altcoin Ethereum [ETH] has continued to see a surge in FX outflows despite recent price action, as noted by on-chain data provider IntoTheBlock in a recent post on X.
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ETH continues to see major FX outflows, with $380 million exiting CEXs this week and about $1.5 million last month pic.twitter.com/WlteNAJssu
— IntoTheBlock (@intotheblock) September 2, 2023
According to the data provider, over $380 million worth of ETH assets left centralized exchanges last week. Last month, the total outflow was about $1.5 million.
Read Ethereum [ETH] Price prediction 2023-24
An increase in an asset’s exchange outflows is often seen as a bullish signal, as it indicates a reduction in the amount of that asset available for trading on exchanges. This decrease in supply can create an imbalance between supply and demand, potentially driving up the price of the asset due to increased competition among buyers.
It could also mean that investors send their holdings to private wallets to exploit them less readily available for immediate sale. This often leads to less selling pressure in the market, which can contribute to price stability or price increases.
Additionally, high FX outflows could be due to investors moving their holdings into stalking pools. This is very plausible in the case of ETH, as data from Dune Analytics showed that the amount of weekly ETH wagered has increased over the past few weeks. In August, it rose by 2%.
Source: Dune Analytics
Bitcoin is to blame
Since Bitcoin’s liquidity surge on August 17th [BTC] On the futures markets, ETH has been trading in a tight price range between $1600 and $1700. At press time, the transaction price of ETH was $1,635.
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Due to the statistically significant positive correlation with the king coin, the deleveraging event led to a downtrend in ETH as the bears regained control on Aug. 17 and have been pressuring the altcoin’s price ever since.
On a D1 chart, ETH’s Moving Average Convergence/Divergence (MACD) indicator showed that the MACD line breached the trendline shortly after capital exited the BTC market as many sold their ETH holdings fearing a ripple effect .
At press time, the bears remained in control of the market among daily ETH traders. According to the coin’s directional movement index, the positive directional index (green) was at 14.03, below the negative directional index (red) at 34.44. This indicated that the strength of the sellers was significantly higher than that of the buyers.
Likewise, the average directional index (yellow) above 25 at 42.95 indicated a strong downtrend in the market. ETH price could go down or stagnate without a change in sentiment.
Source: ETH/USDT on TradingView
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