Over the past week, the price of Ethereum has declined significantly, following Bitcoin’s retreat towards $59,000. As the price of the second-largest cryptocurrency fell to $1,505, data from a recent on-chain analysis reveals an underlying shift in activity between exchanges.
Ethereum Exchange Inflows Reach 2.24 Million in One Day
In a June 6 Quicktake article, on-chain analytics group Arab Chain cited data from the “Ethereum: Exchange Inflow (Total) – All Exchanges” metric, 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, the metric measures the total amount of ETH transferred to all tracked cryptocurrency exchanges over a period of time, helping to gauge potential selling pressure as coins are transferred to trading platforms. When inflows are high, it suggests that a large amount of ETH could be being prepared for sale.
As Arab Chain notes, when large volumes of Ethereum are transferred to trading platforms, it is generally considered a bearish signal or an imminent increase in trading activity (which could translate into increased volatility). Indeed, increasing inflows indicate that there is more supply available for distribution than in the past.
Binance Leads Exchanges in Inflow Volume
Arab Chain notably highlights that Binance, the world’s leading cryptocurrency exchange by trading volume, held the lion’s share of Ethereum inflows. According to the analytics group, Binance saw over 1.16 million ETH inflows on the same day, while a total of 2.24 million ETH was sent to all exchanges.
It is interesting to note that the increase in foreign exchange inflows would have followed a period of relative stability in deposit activity. Thus, Arab Chain explains that this sudden surge – after periods of calm – becomes more significant than other previous events. According to the crypto group, this could indicate that Ethereum investors are preparing to take profits or restructure their portfolios.
However, Arab Chain notes that high inflows are not a surefire indicator of bear markets. Nonetheless, they remain very relevant given Ethereum’s price weakness. According to Arab Chain, sustained high inflows of Ethereum into exchanges (with a focus on Binance) could intensify selling pressure and trigger a further downturn in the second-largest cryptocurrency in the near term.
At the time of writing, the price of Ethereum is $1,577. According to data from CoinMarketCap, the price of Ethereum fell by 5.35% over the past day.
