Quentin pointed out how trends in the BitMEX exchange reserve have impacted the price of Ethereum over the past few years.
BitMEX Ethereum whales have demonstrated clever money behavior in recent years
In a tiny summary of CryptoQuant post, the analyst discussed the pattern in the BitMEX platform’s ETH exchange reserve. “Exchange Reserve” here refers to an on-chain metric that tracks the total amount of Ethereum held in the wallets of any centralized exchange.
When the value of this indicator increases, investors will now make net deposits to the platform. Since one of the main reasons investors move to stock exchanges is to sell, this trend could have potential bearish consequences for the asset price.
On the other hand, the decline in the indicator suggests that the net amount of cryptocurrency supply is draining from wallets associated with the exchange. Investors tend to self-custodize their coins if they plan to hold them for a longer period of time, so such a trend could be bullish for the coin.
Here is a chart showing the Ethereum exchange reserve trend for BitMEX over the last few years:
As you can see in the chart above, the Ethereum exchange reserve on the BitMEX platform has seen a piercing boost already in mid-2022. This would suggest that investors have made significant net deposits into the stock market.
By volume, there are a significant number of whales living on the platform, so such high inflow activity would reflect the behavior of these huge investors.
Interestingly, the rapid boost in the indicator occurred just before ETH hit bear market lows. So it seems possible that these enormous asset holders predicted that things were about to get worse for a given asset, so they pulled the trigger on selling while they still had the chance.
The next noticeable change in BitMEX’s currency reserve occurred in September 2023, when whales took out a huge amount of Ethereum, almost completely replicating the earlier bear market surge.
It is clear from the chart that shortly after these net outflows occurred, the price of the cryptocurrency began a piercing rise, eventually breaking above the $4,000 level for the first time since December 2021.
It looks like these clever money whales were right in their market intuition once again, as they were able to buy just in time for the rally.
Since these net outflows in September, the index has not shown any significant changes as its value has moved sideways. Given the historical trend, it is worth paying attention to any recent deviations that emerge, as they could potentially mean another change for Ethereum.
ETH price
Ethereum showed some strength from its lows yesterday, but the trend has calmed down as ETH is still trading around $3,400 today.
