Ethereum has made a recovery to $2,800 during the past day as on-chain data shows the whales have been making massive withdrawals from exchanges.
Ethereum Exchange Outflows Spiked After Price Crash
According to data from the market intelligence platform IntoTheBlock, investors reacted to the latest crash in the Ethereum price by making outflows from exchanges.
The on-chain indicator of relevance here is the “Exchange Netflow,” which keeps track of the net amount of the cryptocurrency that’s entering into or exiting the wallets associated with all centralized exchanges.
When the value of this metric is positive, it means the holders are depositing a net number of coins into these platforms. As one of the main reasons why investors transfer to the exchanges is for selling-related purposes, this kind of trend can be a bearish sign for the asset’s price.
On the other hand, the indicator being negative suggests the outflows outweigh the inflows and a net number of tokens is moving out of the exchanges. Such a trend can indicate that the investors are accumulating, which is something that can naturally be bullish for ETH.
Now, here is a chart that shows the trend in the Ethereum Exchange Netflow over the past year:
As is visible in the above graph, the Ethereum Exchange Netflow observed a massive negative spike yesterday after the crash in the asset’s price took place.
In total, the investors withdrew 350,000 ETH (worth around $982 million at the current exchange rate of the token) from the exchanges in this outflow spree. “This is the highest amount of net exchange withdrawals since January 2024!” notes the analytics firm.
Given the timing of the outflows, it would appear likely that they were made by whales looking to buy Ethereum at cheap post-crash prices. The accumulation from the investors has in turn helped the cryptocurrency reach a bottom and make some recovery.
The Exchange Netflow could now be to keep an eye on in the coming days, as the upcoming trend in it might also influence the ETH price. Naturally, a continuation of the outflows would be a positive sign, while an increase in inflows could spell a bearish outcome.
In some other news, the number two stablecoin by market cap, USDC, has seen its transaction count shoot up recently, as IntoTheBlock has pointed out in another X post.
“USDC is becoming increasingly popular, with the number of daily transactions increasing by over 119% in the last year!” says the analytics firm. Stablecoins can end up acting as fuel for volatile assets like Ethereum, so increased activity related to them can be a good sign for the market.
ETH Price
At the time of writing, Ethereum is floating around $2,800, down more than 11% over the last seven days.