Ethereum’s price has dropped significantly over the past week, following Bitcoin’s price drop to $59,000. As the price of the second-largest cryptocurrency fell to $1,505, data from the latest network analysis reveals a fundamental shift in activity across exchanges.
The inflow of funds from the Ethereum exchange increased to 2.24 million per day
In Quick post On June 6, analytical group Arab Chain cited data from the “Ethereum: Exchange Inflow (Total) – All Exchanges” meter, noting that inflows across all platforms recently reached 2.24 million in a single day. According to Arab Chain, this is the highest point reached in the last four months.
For context, this metric measures the total amount of ETH transferred to all tracked cryptocurrency exchanges over a given period, helping to gauge potential selling pressure as coins are moved to trading platforms. High inflows suggest that a vast amount of ETH may be being prepared for sale.
As Arab Chain notes, when vast volumes of Ethereum are moved to trading platforms, it is usually perceived as a bear signal or an upcoming augment in trading activity (which can translate into increased volatility). This is because increasing inflows indicate that there is more supply available for distribution than in the past.
Binance conducts an inflow volume exchange
In particular, Arab Chain points out that Binance, the world’s leading cryptocurrency exchange by trading volume, had the lion’s share of Ethereum inflows. According to the research group, Binance recorded inflows of over 1.16 million ETH on the same day, while a total of 2.24 million ETH was sent to all exchanges.
Interestingly, the pointed augment in foreign exchange inflows followed a period of relative stability in deposit activity. Thus, Arab Chain explains that this sudden augment – after periods of composed – becomes more essential than other previous events. According to the cryptocurrency group, this could signal that Ethereum investors are preparing to take profits or restructure their portfolios.
However, Arab Chain notes that high inflows are not a reliable indicator of bear markets. Nevertheless, they remain highly relevant given the weakness in Ethereum prices. According to Arab Chain, the continued high inflow of Ethereum to exchanges (with particular emphasis on Binance) may intensify selling pressure and trigger a further deterioration of the second-largest cryptocurrency in the near future.
At the time of writing, Ethereum is trading at $1,577. According to CoinMarketCap data, the Ethereum price has fallen by 5.35% over the past day.
