Ethereum withdrawals from centralized exchanges have surged over the past week, signaling the direction of investor sentiment for the period. Considering the sheer volume of ETH withdrawn from these exchanges, it is wise to try to understand what this could mean for the price of the cryptocurrency.
260,000 ETH leaf exchange
Amid the uncertainty plaguing the cryptocurrency market, Ethereum investors are making moves to secure their positions for better price prospects. Titan of Crypto, a pseudonymous cryptocurrency technology analyst, took to X (formerly Twitter) to share what Ethereum investors are doing with their holdings.
Related Reading: If Bitcoin price reaches this level, Bitcoin risks losing $7.2 billion.
The post showed that these investors were withdrawing large amounts of ETH from centralized exchanges. During the week tracked, the report states, a total of 260,000 ETH was withdrawn from exchanges, valued at nearly $800 million at the time.
The cryptocurrency exchange witnessed an outflow of over 260,000. #ETH That’s more than $781 million over the past seven days.
it’s time #Ethereum shining. ✨🌕 pic.twitter.com/jT1aocjvbI
— Cryptocurrency Titan (@Washigorira) April 24, 2024
Exchange deposits and withdrawals are now important for all cryptocurrencies because they allow investors to see how they view those coins and what they are doing with their holdings. Large deposits on centralized exchanges can cause prices to fall significantly as investors often deposit their coins to sell them, as exchanges provide ample liquidity.
In contrast, withdrawals from an exchange mean that investors are not willing to sell their ETH. Rather, they are accumulating coins to wait for a better price before selling. Of course, this is positive for the price of Ethereum because as selling pressure decreases, there is room for the price to recover.
In this case, as investors continue to accumulate, withdrawals are either bullish or cause the price of Ethereum to rise. This is also a sign that investors are expecting a price breakout, and as withdrawals increase, demand may exceed supply, leading to a surge in price.
Ethereum Headwinds Still Negative
Ethereum is currently seeing positive activity from investors, but they are not yet completely bullish. First of all, daily trading volume has decreased significantly. According to data from CoinMarketCap, Ethereum’s trading volume was down about 20% in the last day.
This decline in trading volume actually means that investor interest in trading the coin is decreasing. So if attention starts to shift elsewhere as investors look for better prospects, it could have a negative impact on the price.
Nonetheless, cryptocurrencies still appear optimistic over the long term. Ethereum continues to closely mirror the price performance of Bitcoin, which is expected to remain strong following the successful completion of its fourth halving event.
Currently, Ethereum continues to struggle to stay above $3,100 with a slight gain of 0.18% on the last day. It has experienced several crashes over the past month, resulting in a loss of 12.36% in the last 30 days.
ETH price struggles to hold $3,100 support | Source: ETHUSD on Tradingview.com
Featured image from Investopedia, chart from Tradingview.com
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