On-chain data shows the Ethereum Exchange Netflow has remained negative during the past week, a sign that could be bullish for ETH.
When the value of this metric is positive, it means the investors are depositing a net number of tokens to these platforms. As one of the main reasons why holders transfer to exchanges is for selling-related purposes, this kind of trend can have a bearish impact on the ETH price.
On the other hand, the indicator being under zero suggests the outflows are outweighing the inflows. Generally, investors take their coins away from the custody of exchanges for holding into the long term, so this kind of trend can prove to be bullish for the asset.
Now, here is the chart shared by the analytics firm that shows the trend in the Ethereum Exchange Netflow over the past week:
As displayed in the above graph, the Ethereum Exchange Netflow has mostly been negative inside this window, which implies the holders have been pulling supply out of the centralized exchanges.
In total, the investors have made withdrawals worth $1.2 billion with this outflow spree. “This sustained trend of net outflows, intensifying since early May, signals continued accumulation and reduced sell-side pressure,” notes Sentora.
In the chart, Santiment has included two versions of the indicator: 30-day and 365-day. The former tells us about the profitability of the investors who purchased within the past 30 days and the latter that of the past year buyers.
“It may not mean that prices are about to drop, but it does suggest that the rally will likely slow or halt until the 30-day MVRV dips back down to something more reasonable,” explains Santiment.
At the time of writing, Ethereum is trading around $2,600, up over 43% in the last week.
