Ethereum Volatility Soon? Derivatives Exchanges Receive 82,000 ETH In Deposits
06 Novembro 2024 - 7:00AM
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On-chain data shows derivatives exchanges have just received large
Ethereum deposits, something that could lead to volatility in ETH’s
price. Ethereum Exchange Netflow Has Seen A Sharp Positive Spike
Recently As explained by an analyst in a CryptoQuant Quicktake
post, the Exchange Netflow for ETH has registered a large spike
recently. The “Exchange Netflow” here refers to an on-chain
indicator that keeps track of the net amount of ETH moving into or
out of the wallets associated with centralized exchanges. When the
value of this metric is positive, it means the investors are
depositing a net number of tokens to these platforms. How these
transactions affect ETH depends on the exchange to which the
holders are moving coins. Related Reading: Bitcoin Faces Threat Of
Falling To $63,000 Despite Rising Odds For Trump’s Election Victory
In the case of spot exchanges, investors usually make deposits
whenever they want to sell, so positive exchange netflows to
platforms of this type can lead to a bearish outcome. For
derivatives exchanges, which are relevant platforms in the current
discussion, the relationship with the price doesn’t tend to be so
simple. Holders transfer their coins to these exchanges to open up
fresh positions on the derivatives market. As new positions
generally accompany some leverage, the overall risk in the sector
could be assumed to go up when investors deposit to derivatives
exchanges. This can lead to more volatility for the ETH price. A
negative Exchange Netflow is usually bullish no matter the
platforms involved, as it implies the investors are moving their
coins to self-custodial wallets, potentially because they plan to
hold into the long term. Now, here is a chart that shows the trend
in the Ethereum Exchange Netflow for the derivatives platforms over
the last few weeks: As displayed in the above graph, the Ethereum
Exchange Netflow has seen a large spike into positive territory
recently, which suggests the investors have just made large net
deposits to the derivatives platforms. The holders have transferred
about 82,000 ETH to these exchanges with this net inflow spree. As
mentioned earlier, this trend can lead to higher volatility for
ETH. Related Reading: Bitcoin Price Decline Worsens: Could It Be
Setting Up for Major Reversal? It’s hard to say which direction any
emerging volatility might take the cryptocurrency in, as other
positive spikes in the last couple of months have proven to be a
mixed bag. Given that the latest spike has coincided with a plunge
in Ethereum’s price, though, a lot of these may be short positions
predicting a further decline. If so, a swing to the upside
could lead to liquidating these positions, which would
add fuel to the rally. ETH Price At the time of writing, Ethereum
is trading at around $2,400, down almost 7% over the last week.
Featured image from Dall-E, CryptoQuant.com, chart from
TradingView.com
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