On-chain data shows the Ethereum exchange inflows have declined to low values recently, a sign that could be bullish for the crypto’s price.
Ethereum 7-day MA Exchange Inflows Have Gone Down In Recent Weeks
As pointed out by an analyst in a CryptoQuant post, the ETH price has been reversing up as the PoS merge comes near.
The “exchange inflow” is an indicator that measures the total amount of Ethereum moving into wallets of all centralized exchanges.
When the value of this metric shoots up, it means a large number of coins are being deposited into exchanges right now. Since investors usually transfer to exchanges for selling purposes, such a trend can be bearish for the price of the crypto.
On the other hand, low values of the indicator can suggest holders aren’t sending in many coins to exchanges at the moment. Depending on whether they are also withdrawing or not, this trend could be either bullish or neutral for the value of ETH.
Now, here is a chart that shows the trend in the Ethereum 7-day moving average all exchanges inflow over the past six months:
The 7-day MA value of the metric seems to have been going down in recent days | Source: CryptoQuant
As you can see in the above graph, the Ethereum exchange inflows sharply rose up in June and hit a peak. The price simultaneously suffered a big hit due to the selloff.
Following this surge, the indicator’s value started to observe a decline. Around when the ETH developers announced the 19th September date for the PoS merge, the coin’s price started making recovery as the inflows continued to trend down.
Now the metric finds itself at pretty low values. There has only been one dip below the current values in 2022, which was back in March.
These rock-bottom inflow values can imply Ethereum might see more bullish momentum in the near future as long as the selling pressure remains muted.
The chart also displays data for the “open interest,” another on-chain indicator that measures the amount of positions currently open in the derivatives market.
It looks like the ETH positions have recently seen some growth. An active futures market can result in higher volatility due to excess of leverage, and in this year so far, high open interest hasn’t been constructive for the crypto’s price.
At the time of writing, Ethereum’s price floats around $1.7k, up 12% in the last week. Over the past month, the crypto has gained 56% in value.
The below chart shows the trend in the price of the coin over the last five days.
Looks like the value of the crypto has moved sideways recently | Source: ETHUSD on TradingView
Featured image from Bastian Riccardi on Unsplash.com, charts from TradingView.com, CryptoQuant.com
Image and article originally from www.newsbtc.com. Read the original article here.