The Ethereum (ETH) Exchange Netflow indicator shows a behavioral pattern from ETH whales, leading to price pumps.
Ethereum has not witnessed the most favorable price outlook following The Merge. The asset on which the majority of the community was bullish in the months leading to its transition to PoS has not performed as pundits expected.
In a recent highlight of events, a CryptoQuatnt analysis revealed whale behavior that has in times past led to an Ethereum price pump. Notwithstanding, a dumping scheme has summarily followed these periodic price pumps.
CryptoQuant disclosed the information through its Twitter handle on Monday, sharing a link to the interesting analysis.
Whales deposit #Ethereum into the exchange and raise prices to sell it at a higher price
by @t0_godRead More?https://t.co/qd8W2dQsh7
— CryptoQuant.com (@cryptoquant_com) October 4, 2022
The analysis, which came from pseudonymous Korean crypto trader and CryptoQuant author Crypto Sunmoon, considered the ETH Exchange Netflow metric. “Whales deposit Ethereum into the exchange and raise prices to sell it at a higher price,” he asserted.
As noticed on the ETH Exchange Netflow chart, a sharp rise in the NetFlow of ETH in exchanges has persistently resulted in an ETH price increase. The pattern has continued since 2020.
According to Sunmoon, this results from whales depositing large amounts of Ethereum into exchanges to pump the asset’s price. Nonetheless, once the asset has seen a price pump, the whales sell their holdings for a higher value. This assertion appears accurate, considering that each spike in Exchange Netflow came when the ETH price was low.
“When exchange inflow(mean) increases, it was a short-term, long-term low,” the analyst Sunmoon highlighted. As can be observed on the chart, Ethereum exchange deposits increased periodically during short-term or long-term lows for the asset.
Furthermore, a similarly sharp increase in ETH Exchange Netflow is seen around the period of the Ethereum network’s successful transition to PoS. Following The Merge on September 15, ETH, trading above the $1,600 support at the time, saw a sudden dip.
The asset broke below the supports at $1,600 and $1,500 in less than two days before eventually trading sideways, as it got stuck in a brief consolidation at the $1,400 zone. Notwithstanding, ETH fell below $1,400 on September 18 and has not traded above the price level since then.
As the same increase in the Exchange Netflow pattern is observed, several watchers are expecting a resulting price surge. Notwithstanding, analyst Sunmoon asserts that might not be the case as there are no bullish signs for ETH. “I don’t see any bullish signal right now,” he concluded.
The Ethereum Exchange Netflow still shows a risen value, indicating a generally increased selling pressure on investors. ETH has started bullish movements amidst its consolidation at $1,300 for two weeks.
The asset has gained by 4.95% to trade at $1,353 at the time of reporting. If the ETH price persists in this uptick, the asset could conquer the resistance at $1,400 before long, freeing itself from the shackles of the recent seemingly incessant consolidation.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
