Ethereum Bullish Signal: Exchange Inflows Decline To Low Values

Keshav Verma

2 years ago

3 mins read

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On-chain data shows the Ethereum exchange inflows have declined to low values recently, a sign that could be bullish for the crypto’s price.

Ethereum 7-day MA Exchange Inflows Have Gone Down In Recent Weeks

As pointed out by an analyst in a CryptoQuant post, the ETH price has been reversing up as the PoS merge comes near.

The “exchange inflow” is an indicator that measures the total amount of Ethereum moving into wallets of all centralized exchanges.

When the value of this metric shoots up, it means a large number of coins are being deposited into exchanges right now. Since investors usually transfer to exchanges for selling purposes, such a trend can be bearish for the price of the crypto.

On the other hand, low values of the indicator can suggest holders aren’t sending in many coins to exchanges at the moment. Depending on whether they are also withdrawing or not, this trend could be either bullish or neutral for the value of ETH.

Now, here is a chart that shows the trend in the Ethereum 7-day moving average all exchanges inflow over the past six 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 above graph, the Ethereum exchange inflows sharply rose up in June and hit a peak. The price simultaneously suffered a big hit due to the selloff.

Following this surge, the indicator’s value started to observe a decline. Around when the ETH developers announced the 19th September date for the PoS merge, the coin’s price started making recovery as the inflows continued to trend down.

Now the metric finds itself at pretty low values. There has only been one dip below the current values in 2022, which was back in March.

These rock-bottom inflow values can imply Ethereum might see more bullish momentum in the near future as long as the selling pressure remains muted.

The chart also displays data for the “open interest,” another on-chain indicator that measures the amount of positions currently open in the derivatives market.

It looks like the ETH positions have recently seen some growth. An active futures market can result in higher volatility due to excess of leverage, and in this year so far, high open interest hasn’t been constructive for the crypto’s price.

ETH Price

At the time of writing, Ethereum’s price floats around $1.7k, up 12% in the last week. Over the past month, the crypto has gained 56% in value.

The below chart shows the trend in the price of the coin over the last 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

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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