Quentin pointed out how trends in the BitMEX exchange reserve have impacted the price of Ethereum over the past few years.
BitMEX Ethereum whales have demonstrated clever money behavior in recent years
In a compact summary of CryptoQuant postthe analyst discussed the pattern in BitMEX’s ETH exchange reserve. “Exchange reserve” here refers to an on-chain indicator that tracks the total amount of Ethereum held in the wallets of any centralized exchange.
As this metric increases, investors will now make net deposits into the platform. Since one of the main reasons investors move to stock markets is to sell, this trend could have potentially bearish implications for the asset price.
On the other hand, a drop in the indicator suggests that a net amount of the cryptocurrency supply is flowing out of exchange-linked wallets. Investors tend to self-custody their coins if they plan to hold them for a long time, so such a trend could be bullish for the coin.
Here is a chart showing the Ethereum exchange reserve trend for BitMEX over the last few years:
As you can see in the chart above, Ethereum exchange reserves on the BitMEX platform have seen a edged escalate in mid-2022. This would suggest that investors have made significant net deposits into the exchange.
By volume, there are a significant number of whales living on the platform, so such a gigantic inflow will reflect the behavior of these huge investors.
Interestingly, the rapid escalate in the indicator occurred just before ETH hit bear market lows. So it seems possible that these gigantic asset holders predicted that things were about to get worse for a given asset, so they pulled the trigger on selling while they still had the chance.
The next notable change in BitMEX’s currency reserve occurred in September 2023, when whales took out a massive amount of Ethereum, almost completely reproducing the earlier bear market rally.
It is clear from the chart that shortly after these net outflows occurred, the price of the cryptocurrency began a edged rise, eventually breaking above the $4,000 level for the first time since December 2021.
It looks like these clever money whales were right in their market intuition once again, as they were able to buy just in time for the rally.
Since the September net outflows, the indicator has not shown any significant shifts, as its value has been moving sideways. Given the historical trend, it is worth paying attention to any fresh deviations that emerge, as they could potentially signal another change for Ethereum.
ETH price
Ethereum showed some strength from its lows yesterday, but the trend has calmed down as ETH is still trading around $3,400 today.
