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Ethereum traders sell amid rising exchange reserves

Ethereum traders sell amid rising exchange reserves

GrafaGrafa2024/09/02 23:55
By:Isaac Francis

Ethereum (CRYPTO:ETH) is facing increased selling pressure as traders move their coins to exchanges, leading to a rise in exchange reserves. 

Since August 31, the amount of Ethereum sent to exchanges has gradually increased, coinciding with ETH struggling to break past the $2,750 resistance level. 

Currently trading at $2,466, ETH risks further decline if the selling pressure persists. 

The increase in exchange reserves signals a bearish market sentiment. 

According to CryptoQuant, 19 million ETH, valued at $47 billion, are currently held on exchange wallets, marking a 1.01% rise over the past week—the highest level since August 22. 

Exchange reserves represent the total number of coins held on cryptocurrency exchanges. 

A spike in this metric often indicates that holders are preparing to sell, which can increase selling pressure and lead to a drop in price if there is insufficient buying interest. 

Large ETH holders, commonly known as whales, are also showing signs of caution. 

Data from IntoTheBlock reveals that the netflow of large ETH holders has declined by 36% in the past week and by 17% over the past 30 days. 

This decline in netflow indicates that key holders are selling more ETH than they are buying, reinforcing the bearish outlook. 

When whales reduce their holdings, it often prompts retail investors to do the same, exacerbating the downward pressure on the asset’s price. 

Technical indicators support a continued downtrend for Ethereum. 

The Elder-Ray Index, which measures the balance of power between buyers and sellers, currently shows a negative value of -207.82, suggesting that sellers dominate the market. 

Additionally, Ethereum’s On-Balance Volume (OBV) has been declining since July 31, reflecting increased selling activity. 

As of now, ETH's OBV stands at 41.60 million. 

If selling pressure continues to build, ETH's price could potentially drop another 14%, reaching around $2,111. 

However, a resurgence in demand could help drive the price back up toward $2,579. 

The coming weeks will be critical in determining whether Ethereum can stabilise or if it will extend its losses further. 

At the time of reporting, the Ethereum (ETH) price was $2,536.89.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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