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Withdrawals from the Ethereum exchange hit an annual low. Why is that important?

Ethereum has seen heavily plummeting market withdrawals lately. Market withdrawals are a metric sometimes used to track investor sentiment towards a cryptocurrency. With withdrawals from the Ethereum exchange hitting an annual low, it brings to light some facts about the digital asset and how it has evolved. We’ll examine some of these in this article.

Exchange withdrawals decrease

Data from Glassnode shows withdrawals from essential exchanges have declined. That metric had held up against the tide through several bull rallies when investors decided to move their ETH holdings off the exchanges. It signaled a high accumulation pattern among investors, showing that sentiment remained firmly in positive territory as owners refused to sell.

Related reading | Billionaire Ray Dalio explains why he owns Bitcoin and Ethereum

However, that has now turned as more investors choose to keep their assets on the stock market. This can mean one of two things. One of them would be that the mood has now shifted from buying to selling. Investors are no longer moving their holdings off the exchanges to hold them for the long term, which means they may plan to sell their Ethereum sooner rather than later.

Since the digital asset has just had an impressive rally, investors can begin to take profits if the asset corrects further down.

Withdrawals from Ethereum exchanges hit an annual low | Source: Glassnode

At the same time, investors may expect the digital asset to rebound again and hold its holdings on the exchanges to allow for easier selling if that happens. Nonetheless, in both cases, more ETH on exchanges indicate that investors are ready to sell their coins.

This could mark the end of the bull cycle as investors toss their stocks into the market. As soon as the supply exceeds the demand due to these sales, a further decline in prices is to be expected.

Ethereum liquidations continue

Bitcoinist had reported that Ethereum had seen high liquidations when the price of the digital asset fell. Over $ 31 million worth of futures were liquidated within 24 hours. These liquidations continued as the number has now halved.

Related reading | Bitcoin whale address with $ 11 million activated after 9 years of dormant period

The digital asset had seen over $ 22 million in liquidations in a 12 hour period and more than doubled in the 24 hour period. That number hit $ 51 million in the early hours of Tuesday and promises to continue as Ethereum’s price continues to fluctuate.

ETH price bounced back above $ 4,000, but the bears continue to struggle as the digital asset tries to gain a foothold above that price point.

Ethereum price chart from TradingView.com

ETH recovers over $ 4,000 | Source: ETHUSD on TradingView.com Featured image from Wccftech, chart from TradingView.com

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