Ethereum: How a 60K Exchange Netflow drop can impact ETH prices
Ethereum's netflow has turned negative, with over -60k ETH withdrawn from exchanges.
- ETH has surged by 3% over the past 24 hours.
- Ethereum’s netflows turned negative with -60k ETH withdrawn, reflecting bullishness.
Over the past week, Ethereum [ETH] has experienced extreme volatility hitting a low of $2150 and a high of $2891.
However, during the past three days, the altcoin has experienced a sustained uptrend, rising from $2,633 to $2,850. As of this writing, Ethereum is trading at $2,838, up 3% on daily charts.
Before these price pumps, the altcoin had been on a downward trajectory, dropping on weekly and monthly charts by 11.06% and 22.61%, respectively.
The sudden trend reversal with three consecutive days of gains reflects shifting market sentiment from bearish to bullish. This bullishness is further evidenced by ETH’s massive negative netflows.
Ethereum experiences negative netflows
According to CryptoQuant, Ethereum’s Exchange Netflow for derivative exchanges has experienced a decline of almost -60k ETH for the second time in a week.
With such massive negative netflows, it suggests that investors are actively withdrawing ETH from derivative exchanges.
When netflows turn negative, it implies that traders are actively accumulating, with outflows outpacing inflows.
Historically, such a significant drop reflects reduced selling pressure from large positions being closed, indicating bullish sentiments in the medium term.
As such, with this market behavior, it’s safe to say that traders have turned bullish and expect ETH prices to recover.
What ETH’s charts suggest
With Ethereum’s netflow suggesting a shift in market sentiment, this shift is witnessed across the charts.
For example, Ethereum’s Buyer-Taker-Sell Ratio has surged and surpassed 1 over the past two days to settle at 1.06. This shows that more traders are buying ETH compared to those selling reflecting a higher buying activity.
This buying activity is more prevalent in the U.S. market, with the Coinbase premium index turning positive.
After remaining negative, traders on Coinbase have turned to accumulating ETH after the recent dip.
Additionally, this bullishness is experienced across other exchanges, as evidenced by the declining supply ratio.
This has declined to reach a yearly low of 0.13 implying that more ETH is getting off exchanges than inflow in higher numbers than seen over the past year.
Can ETH see a sustained uptrend?
Notably, with market sentiments turning bullish, ETH is well positioned for a sustained recovery.
This is evidenced by the fact that Ethereum’s Stoch RSI has made a bullish crossover over the past day. A bullish crossover here suggests that ETH is experiencing a sustained upward momentum.
The altcoin’s RSI has surged from 31 to 37, while its Moving Average (MA) was 41. The RSI is closing in on another bullish crossover. A crossover here will validate the uptrend, with ETH making more gains.
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AMBCrypto observed favorable conditions on ETH’s price charts. If these sentiments hold, Ethereum will reclaim $3,000.
A breach of this level will strengthen the altcoin to attempt a run to $3,300, where it faces significant resistance.
However, with heightened volatility over the past week, if bulls fail to hold the market while macroeconomic developments turn unfavorable, it could drop to $2,720. A breach below this level will push it to $2,563.
