As a seasoned crypto investor with over a decade of experience navigating the volatile waters of the digital asset market, I find myself intrigued by recent developments surrounding Ethereum (ETH). Despite the current downward pressure on its price and the drop in trading volume, I remain cautiously optimistic.
At the moment, I’m observing Ethereum holding steady under current market conditions, as indicated by its daily chart analysis. In essence, Ethereum has maintained stability over the past day but experienced a 9% decline in its weekly trading performance. Notably, there’s been a significant decrease in trading volume over the last few days.
Generally speaking, traders are optimistic, predicting a reversal leading to increased prices that surpass current local resistance levels. However, while this trend unfolds, on-chain indicators suggest potential additional factors that aggressive investors might want to keep an eye on.
Over 40,000 ETH Moved From Derivatives Exchanges
As per one expert’s interpretation of CryptoQuant data, there has been a significant trend of funds moving out from derivative exchanges in recent trading periods. More precisely, this analyst points out that approximately 40,000 Ether have been transferred away from derivatives trading platforms such as Binance and OKX.
When derivatives see a surge of funds moving to spot markets, it might imply that traders are adopting a cautious approach and preferring to wait for more definite signs before making a move. Interestingly, this can be seen as a positive sign, as outflows from derivatives lead to growing inflows into the spot market.
If the amount of deposits into immediate trading platforms, particularly those originating from derivative trading platforms and not personal non-custodial wallets, rises significantly, this could help reduce speculative demand, thereby potentially boosting prices. An increase in withdrawals from derivative exchanges implies that fewer traders are choosing to gamble on cryptocurrency price fluctuations by taking leveraged short or long positions, which is a sign of reduced enthusiasm for crypto trading.
Based on this development, it’s crucial to observe how prices change in the upcoming trading sessions. If the price falls below $2,100 and reaches the lows of August, it could initiate a sell-off, compelling highly leveraged traders to switch to defensive strategies and transfer their coins from margin to spot trading. From there, they might opt to move these coins to stablecoins.
Instead, if the price rises beyond $2,800, it could boost optimism and market sentiment, paving the way for a new surge towards $3,000 and even $3,500. This increased confidence would encourage more traders to borrow Ether (ETH) from exchanges, allowing them to take on leveraged positions.
Ethereum Gas Fees And Institutional Demand Fading
In light of recent progress, Ethereum is still encountering challenges. For instance, certain experts propose that decreasing gas fees might reduce demand, casting doubt on the network’s long-term viability.
On September 9, the cost of Ethereum transaction fees (gas fees) was approximately 2.862 gwei, marking a decrease from the 14.21 gwei recorded one year prior, based on data provided by YCharts.
Moreover, there’s a steady decrease in institutional interest for Ethereum through exchange-traded funds (ETFs). As of now, the total withdrawal from all U.S.-based Ethereum ETFs amounts to over $568 million, based on data provided by SosoValue.
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2024-09-10 05:11