Unfortunately for Ethereum holds, on-chain data shows that assets still remain under pressure
After Independence Day in the United States on July 4, traders pushed the price of the second largest cryptocurrency in the market at local highs, hitting $1,120. Unfortunately, with the rally in Ether price, we are seeing some disturbing on-chain data appearing in the market.
According to Ethereum’s supply on exchanges, we are seeing an intensification of inflows on exchanges as traders are actively pushing their funds back onto trading platforms. Whenever exchange inflows are on the rise, assets face selling pressure later on.
The movement of funds to exchanges is most likely related to market participants looking for ways to realize their funds after the massive crash we saw in June. As the price of Ethereum fell into the $800 range, the selling pressure in the market decreased significantly.
It might not be that bad
Rising inflows on exchanges might not be tied to the desire of traders to sell their holdings, as centralized exchanges often move some of their funds from cold to hot wallets to increase the liquidity on the market and provide market makers with needed funds.
The series of liquidations we saw in June are also linked to large inflows on exchanges, as decentralized platforms no longer hold as much Ether as they once did. With the decline in demand for secured loans, investors are returning to more “traditional” investing and trading instruments.
At press time, Ethereum is trading at $1,158 and remaining under the pressure of bears on the market, as it is not yet receiving enough buying support and is currently moving under the 21-day moving average.
