Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com<\/div>\n","protected":false},"excerpt":{"rendered":"
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\u2019s 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,\u00a0a swing to the upside could lead to\u00a0liquidating\u00a0these 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<\/p>\n","protected":false},"author":542,"featured_media":651736,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[13625],"tags":[8323,1946,93328,85916,16746,78803],"class_list":["post-651734","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ethereum","tag-eth","tag-ethereum","tag-ethereum-derivatives-netflow","tag-ethereum-exchange-inflows","tag-ethereum-volatility","tag-ethusdt"],"acf":[],"yoast_head":"\n
Ethereum Volatility Soon? Derivatives Exchanges Receive 82,000 ETH In Deposits<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n