Bitcoin and Ethereum holders face increased selling pressure, as indicated by exchange Inflows and funding rates.
Despite occasional relief rallies, the bears have taken firm control of the markets as assets plunge to record lows. Bitcoin (BTC) and Ethereum (ETH) – the two largest cryptocurrencies by valuation – have not been spared in this onslaught. Additionally, recent data corroborate assertions of selling signals from holders of both assets.
On-chain data analytics platform, CryptoQuant recently revealed the metrics as the macro climate precipitates further bearishness. The CryptoQuant analysis confirmed the selling pressure, considering two crucial indicators.
Weekly Bitcoin Highlights (2022.09.23)
"Inflows and Funding Rates' Firm Selling Signals."
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— CryptoQuant.com (@cryptoquant_com) September 23, 2022
“Two data sets marked the selling pressure both in Bitcoin and Ethereum this week: Exchange Inflow and Funding Rates,” the analysis noted. The article highlighted the declining macro condition, as the Fed expects an interest rate hike to 4.6% in 2023 – a review of the 3.6% average forecast in March.
Apparently, exchanges have recently seen a massive inflow of Bitcoin and Ethereum tokens. Generally, investors move their holdings to exchanges when they intend to sell them off. Consequently, a rise in exchange inflow tends to pump bearishness into the atmosphere.
Since the CryptoQuant BTC Exchange Netflow currently indicates a low value compared to the 7-day average, inflows have generally increased during this period. Additionally, the BTC reserve on exchanges has seen a recent spike, indicating selling pressure.
With ETH, Exchange Netflow reveals a massively bearish indication. Exchanges have recently seen a surging inflow of ETH, as the Exchange Netflow value remains higher than the 7-day average. The CryptoQuant analysis highlighted that these inflows of ETH tokens were witnessed just before the Merge.
Furthermore, the Derivatives Markets do not bode well for BTC and ETH. Funding Rates for both assets have remained negative, indicating investors’ readiness to short the assets. “Additionally, as the Merge neared, funding rates for ETH were the worst ever recorded,” the CryptoQuant analysis added.
In addition to their Funding Rates, the ETH Taker Buy Sell Ratio is under the 1-mark. With a value of 0.96, the ratio indicates a dominant bearish sentiment in the ETH derivatives market.
Regarding BTC, the Taker Buy Sell Ratio shows an even more dominant bearish sentiment. The current ratio is 0.95, showing that takers are filling more sell orders than buy orders.
“In addition to the two sets of metrics above, we continue to see increasing activity from whale sending coins to exchanges, substantiating the selling pressure,” CryptoQuant concluded.
As macroeconomic conditions continue to deteriorate, risk assets have been handicapped in the recent battle against the bears. Due to their recent entanglement with traditional finance, cryptocurrencies have not been caught up in this tussle.
BTC and ETH are trading at $18,906 and $1,286 as of press time. Notwithstanding, ETH has seen a more massive dip in the past seven days despite the Merge, as it sheds 12.64% of its value. BTC, on the other hand, is down 4.74% in the past week.