Ethereum, the second-largest cryptocurrency by market cap, has recently shown significant movements in its derivatives market.
According to an analysis by CryptoQuant analyst ‘Heisenberg,’ Ethereum’s netflow on derivative exchanges has turned notably negative, with an outflow exceeding 40,000 ETH.
Ethereum Derivatives Market Outflow: Key Insights
Heisenberg highlighted that netflow represents the difference between the amount of Ethereum deposited into exchanges (inflows) and the amount withdrawn (outflows). A negative netflow implies that more ETH is being withdrawn from derivative exchanges than deposited, which could indicate reduced selling pressure.
Derivatives exchanges are often used for leveraged trading and short selling. The reported negative netflow of 40,000 ETH suggests that selling pressure on Ethereum might be easing, potentially leading to a more stable market environment.
Increased withdrawals typically signal that investors and traders are holding onto their assets rather than selling, contributing to decreased selling pressure. This reduction is a positive indicator for Ethereum’s near-term price stability. Moreover, reduced borrowing on derivative platforms could suggest a decline in interest for opening new short positions, further alleviating downward price pressure.
ETH Price Outlook
Despite this significant outflow from derivative exchanges, Ethereum’s price performance hasn’t seen an immediate recovery. Over the past week, ETH has dropped by 9.2%, although it experienced a slight 0.5% gain in the last 24 hours.
As of now, ETH is trading at $2,282, with a 24-hour high of $2,334 and a low of $2,246. Daily trading volume remains modest, fluctuating between $11 billion and $13 billion over the past week. Crypto analyst Ezekiel remarked, “It’s not the crypto bottom until ETH drops below $2,000.”
