On-chain data shows that Ethereum exchange network flow has increased significantly recently, which could be a bearish signal for the cryptocurrency’s price.

Ethereum Exchange Netflow has seen robust positive growth recently

In New post on X, market intelligence platform IntoTheBlock discussed the latest trend that is emerging in the net exchange flow metric for Ethereum.

“Exchange network flow” here refers to an on-chain metric that tracks the net amount of any cryptocurrency entering or leaving wallets associated with centralized exchanges.

When the value of this indicator is positive, it means that investors are currently depositing a certain amount of net tokens on these platforms. Generally speaking, one of the main reasons why holders may move to exchanges is for selling purposes, so this trend could have a bearish impact on the asset price.

On the other hand, a negative ratio means that exchanges are currently tightening supply as outflows exceed inflows. Such a trend could be a sign of investor accumulation, which could naturally be bullish for the coin.

Here is a chart showing the trend of Ethereum exchange network flow from the beginning of 2024:

The graph shows that the Ethereum exchange network flow has seen positive growth recently. At its peak, the exchanges received 140,660 ETH in net deposits.

At the current cryptocurrency price, this amount is equivalent to almost $547 million. That’s a huge amount and the biggest net deposit frenzy these central entities have seen since January.

“High stock inflows are usually a sign of selling behavior as people either try to claim profits or succumb to FUD,” the analyst firm notes. Interestingly, however, since these deposits appeared, the price of the asset has increased.

This may suggest that either the whales generating the inflow of coins have not yet pulled the trigger on selling these coins, or they did not plan to sell them in the first place. Of course, it is also possible that market demand was able to absorb the sales if the whales did sell.

In a scenario where whales have made deposits with the intention of selling but have not yet transacted, Ethereum could experience a bearish effect.

Time will tell how the price of the cryptocurrency will develop in the coming days and whether these immense deposits will play any evident role at all.

ETH price

Ethereum has seen a decline earlier, but the asset has managed to recover as its price remains above $3,900 again.

Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com