Ethereum news is abuzz with anticipation about ETH price. Is it headed for more downside, or will it bounce back, especially after encountering a short-term resistance zone?
Sentiment deterioration over the last few days has resulted in higher uncertainty, but recent observations may offer some insights.
The Ethereum price may be preparing for some recovery as per exchange flow data.
According to Cryptoquant, total ETH netflows registered a spike in their 30-day simple moving average (SMA).
It jumped to levels last seen in September 2023, signaling that investors were moving their funds into self-custody wallets.
However, this did not reflect on the Ethereum price chart just yet. Nevertheless, the surge in ETH exchange outflows was noteworthy, and it occurred at a significant level.
Ethereum (ETH) price dipped during the weekend, resulting in a short-term support retest just below $4,100.
Whether ETH price will bounce back from its current level depends on the level of demand that will manifest within the support zone.
Whale Activity Signals Ethereum (ETH) Price Bullish Confidence
Large order book data revealed that whales were limiting their exposure on the spot market while doing the opposite in the derivatives segment.
For context, whales sold $4.39 million worth of ETH on Binance spot in the last 2 days. Meanwhile, Binance whales executed over $3 billion worth of long positions.
OKX whales also demonstrated a similar observation, with spot outflows amounting to just over $6 million, and over $662 million worth of longs.
This observation signaled that whales contributed to the recent sell-off, but they also expected to benefit in case of an upside.
Interestingly, spot outflows have been cooling down, reflecting the recent sell pressure cool down.
Although the declining spot outflows may signal that the bears were running out of momentum, the market outcome reflects the extent of damage.
Open interest at the time of observation was just over $54.7 billion, which was down by over $8 billion from last week’s high.
The cooling open interest was likely because investors were spoofed by the recent crash.
ETH long liquidations on Monday peaked above $490 million, which was the highest daily liquidation observed in more than 5 months.
These observations underscored the potential for a bullish pivot if demand makes a solid comeback.
However, weak demand may pave the way for more capitulation. However, there is one key area that could point towards where the price bias may fall.
Ethereum Netflows Surge to the Highest Weekly Levels in History
DeFiLlama data revealed that weekly Ethereum net inflows just surged to $3.24 billion. This marked the highest recorded weekly inflows in history.
Moreover, this latest spike occurred within the last 3 days, since Monday.
Zooming in on the net inflows revealed a massive spike on Tuesday, during which inflows surged by $2.7 billion. This was the highest daily net inflow observed in a single day.
Such a massive spike in net inflows meant that more liquidity was flowing into the Ethereum network. An outcome that is more linked to investor confidence rather than deteriorating sentiment.
Moreover, this occurred while the market was in fear territory, where demand is more likely to recover.
Whether this observation will pave the way for a strong bounce back remains to be seen, especially since Ethereum ETF flows remained negative in the first half of the week.
