Ethereum is under pressure at the time of writing, and we looked at the formation on the daily chart. In summary, ETH is stable on the last day, but has fallen 9% in the last week of trading. It is noteworthy that the trading volume has decreased significantly over the past few days.
Overall, traders are bullish and expect the price to reverse and surge higher, overcoming the immediate local resistance. While this is developing, on-chain data points out other developments that leveraged traders should monitor closely.
Over 40,000 ETH Moved on Derivatives Exchanges
According to one analyst, citing CryptoQuant data, there have been more outflows from derivatives exchanges in the past few weeks. Specifically, the analyst Observe More than 40,000 ETH were moved on derivatives trading platforms such as Binance and OKX.
From a trading perspective, whenever there is a surge in outflows from derivatives to spot exchanges, it may indicate that traders are cautious and wait for a clearer definition before committing. However, this is also positive, especially considering that outflows from derivatives often mean increased inflows to spot exchanges.
In particular, a surge in deposits from derivatives exchanges to spot exchanges rather than external non-custodial wallets can reduce speculative pressure and support prices. As outflows from derivatives exchanges increase, this is a signal that fewer traders are willing to bet on the price of cryptocurrencies and take leveraged short or long positions.
Reading this development, it will be important to see how the price moves in the next few trading sessions. Technically, if it falls below $2,100 and hits the August low, selling could begin, causing more leveraged traders to switch to conservation mode and move their coins to spot, and from there to stablecoins.
Conversely, a reversal above $2,800 could boost sentiment and create a foundation for another rally to $3,000 and $3,500. This would then increase confidence and lead more traders to take leveraged positions and borrow ETH from exchanges.
Ethereum Gas Fees and Institutional Demand Decline
Despite these developments, Ethereum still faces headwinds. For example, some analysts argue that the decline in gas fees could negatively impact demand, raising questions about the network’s long-term sustainability.
As of September 9, the Ethereum gas fee has dropped from 14.21gwei registered a year ago to 2.862gwei. Y chart.
Additionally, institutional demand for Ethereum via spot ETFs continues to decline. Net outflows across all spot Ethereum ETFs in the US have so far exceeded $568 million. Soso Value.
Feature image from Canva, chart from TradingView