On-chain data shows the Ethereum exchange netflow has witnessed a negative spike during the past week, a potential sign that investors have been accumulating.
Ethereum Exchange Netflow Has Been Red For The Past Week
As pointed out by institutional DeFi solutions provider Sentora in a new post on X, Ethereum has seen net outflows from exchanges in the past week. The indicator of relevance here is the “Exchange Netflow,” which measures the net amount of ETH that’s moving into or out of wallets connected with centralized exchanges.
When the value of this metric is positive, it means the investors are depositing a net number of tokens to these platforms. As one of the main reasons why holders deposit their coins to exchanges is for selling-related purposes, this kind of trend can be bearish for the asset’s price.
On the other hand, the indicator being below zero suggests outflows are dominating the inflows on exchanges. Such a trend can be a sign that investors are in a phase of accumulation, which can naturally be bullish for the cryptocurrency.
As the data shared by Sentora shows, Ethereum has seen a weekly Exchange Netflow value of -$978.45 million, indicating that traders have made a massive amount of net withdrawals.
The significant outflows have come as Ethereum has witnessed a decline during the past week. As Sentora explains:
This signals aggressive accumulation where investors are likely “buying the dip” and withdrawing assets to cold storage or on-chain environments, tightening the liquid supply despite the negative price momentum.
The price drawdown in the past week has also accompanied a drop in the total transaction fees on the network, meaning that transfer activity has gone down. The blockchain saw about $2.64 million in fees over the last week, which is more than 15% down week-over-week.
ETH Saw A Brief Visit Under $2,800 Before Rebounding
Ethereum observed a decline to $2,780 on Thursday, but the asset was able to bounce back as it’s now floating just under $3,000.
Interestingly, ETH’s bottom was around the same level as a major on-chain supply cluster, as a chart shared by analyst Ali Martinez in an X post shows.
In the graph, Martinez has attached the data of the Ethereum UTXO Realized Price Distribution (URPD) from on-chain analytics firm Glassnode. This metric basically tells us how much ETH supply was last transacted at the various price levels that the coin has visited in its history.
There is a huge supply zone located at $2,772 on the URPD, suggesting a large amount of investors have their cost basis at it. Generally, such levels act as a support boundary during downtrends, as traders who purchased there buy the dip to defend it.
]]>US Bitcoin ETF records inflow for the second consecutive day, sparking optimism among investors. Besides, it also comes amid a significant BTC rally, with the flagship crypto soaring past the $100K mark. So, these recent robust influxes, indicating increased institutional interest, could further push the crypto’s price toward the north.
US Spot Bitcoin ETF Records Strong Inflow
The US Spot Bitcoin recorded an inflow of $978.6 million on January 06, 2024, marking the second consecutive day of influxes. The previously recorded inward flow, according to Farside Investors data was worth $908.1 million and both now contribute to the historical cumulative positive flow of $36.89 billion.
Notably, Fidelity’s FBTC led the charge with an inflow of $370.2 million on Monday, followed by BlackRock’s IBIT bringing in the flow of $209.1 million. Every issuer recorded a positive number for its respective Bitcoin ETF except Invesco, Valkyrie, and WTree which reported muted fund flows. Nevertheless, the trend across the Bitcoin ETF segment shows that there is increasing institutional confidence in the flagship cryptocurrency.
On the other hand, corporations like Michael Saylor’s MicroStrategy, Metaplanet, and others, are also increasing their focus on BTC. MicroStrategy recently acquired 1,070 BTC at an approximate price of $101 million at the time of purchase.
Meanwhile, Vivek Ramaswamy’s Strive Asset Management also showed a strong interest in the flagship crypto. Strive filed to launch a new Bitcoin Bond ETF to invest in bonds that are issued by companies for the purchase of BTC.
Can BTC Hold Its Momentum?
Bitcoin price today was up by 2.76%, hovering around $101,462.39 while adding about 9% in the last 7 days. There is simultaneously an increase in the market cap which is up by 2.60% to $2 trillion along with the 24-hour trading volume showing a soaring value of $48.18 billion.
Some fundamental aspects that are contributing to the bullish momentum are Donald Trump getting closer to taking the US Presidential Chair. It also fuels speculation about the possibility of the US soon having its Bitcoin Strategic Reserve. Besides, several other countries like Hong Kong and Germany are also exploring a similar move ahead.
Adding to the excitement, Michael van de Poppe, a well-known analyst, has hinted that a new ATH is on the horizon if BTC holds a value of $98,000. While he has not mentioned a number on his X post, Michael has hinted that the price’s next stop could be at $104,087. This flurry of positive sentiments like the robust Bitcoin ETF influx and other market trends has fueled market sentiment.
Another factor that strengthens positivity towards holding the momentum is constant support from Whale. A report by Lookonchain published on X highlighted that 3 newly created wallets withdrew 2,173 BTC worth approximately $221.6 million at that time.
However, there is also a different side to the Bitcoin price rally which is driven by bearish sentiments. A BTC price analysis highlights that any sudden spike in the Open Interest often brings a shake-off for buyers or sellers, provided it happens in a short time. The current trend aligns with that, sparking a tale of caution for every BTC enthusiast. Although the anticipation of a BTC rally is high, it is recommended to be cautious as the crypto market is highly volatile.
Coingape Staff
CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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