On-chain data shows that Ethereum exchange flows have dropped to low values recently, a potentially bullish sign for the cryptocurrency’s price.
7-day MA exchange flows from Ethereum have decreased in recent weeks
As pointed out by an analyst at CryptoQuant MailETH price has been reversing as the PoS merger approaches.
The “exchange flow“It is an indicator that measures the total amount of Ethereum that moves into the wallets of all central exchanges.
When the value of this metric goes up, it means that a large number of coins are deposited on the exchanges at the moment. Since investors usually go to exchanges for selling purposes, this trend may be bearish for the price of the cryptocurrency.
On the other hand, low index values can indicate that holders are not sending many coins to exchanges at the moment. Depending on whether they are also withdrawing or not, this trend could be bullish or neutral for the value of ETH.
Now, here is a chart showing the trend in the 7-day moving average in Ethereum, and the flow of all exchanges over the past 6 months:
The 7-day MA value of the metric seems to have been going down in recent days | Source: CryptoQuant
As you can see in the chart above, Ethereum exchange flows rose sharply in June and peaked. At the same time, the price took a big hit due to the selling.
After this rise, the value of the indicator began to notice a decrease. When the ETH developers announced the September 19 date of the PoS consolidation, the coin’s price started to recover as inflows continued to trend downward.
Now the scale finds itself at very low values. There was only one drop from current values in 2022, which was in March.
Flow values below the gutter could indicate that Ethereum could see more bullish momentum in the near future as long as the selling pressure remains muted.
The chart also shows data for “frank interestAnother on-chain indicator that measures the number of trades currently open in the derivatives market.
It appears that ETH positions have seen some growth lately. An active futures market can lead to higher volatility due to increased leverage, and this year so far, the high open interest has not been constructive for the cryptocurrency price.
ETH . price
At the time of writing this report, Ethereum price It is floating around $1.7K, up 12% in the past week. Over the past month, the cryptocurrency has gained 56% of its value.
The chart below shows the currency price trend over the past five days.
Looks like the value of the crypto has moved sideways recently | Source: ETHUSD on TradingView
Featured image from Bastian Riccardi on Unsplash.com, charts from TradingView.com, CryptoQuant.com