Ethereum Bearish Signal: Netflows Turn Sharply Positive

Keshav Verma

Last Updated: February 17, 2022 7:00 pm

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

On-chain data shows the Ethereum netflows are sharply turning positive, a sign that could prove to be bearish for the crypto.

Ethereum Exchange Reserve Rises As Netflows Become Positive

As pointed out by an analyst in a CryptoQuant post, exchanges have observed net ETH inflows recently, swelling up their reserves.

The “all exchanges netflow” is an indicator that measures the net amount of Ethereum moving into or out of wallets of all exchanges. The metric’s value is calculated by taking the difference between the inflows and the outflows.

When the value of the indicator is positive, it means exchanges are getting more inflows right now than outflows. Such a trend can be bearish for the price of the coin as investors usually deposit their ETH to exchanges for selling purposes.

On the other hand, negative netflow values imply that outflows are currently overwhelming the inflows. Sustained such values can be bullish for Ethereum as it may be a sign of accumulation.

Now, here is a chart that shows the trend in the ETH netflows over the past year:

Looks like the indicator's value has recently risen above zero | Source: CryptoQuant

As you can see in the above graph, the Ethereum netflows have sharply increased to positive values in the past couple of weeks.

The effect of these net inflows can be seen through the exchange reserve indicator, which measures the total amount of ETH sitting on exchanges. Below is the chart for it.

The indicator seems to have surged up recently | Source: CryptoQuant

As the graph shows, the Ethereum exchange reserve has sharply increased in value in the past week. Which is expected, as the netflows have been positive lately.

The exchange reserve is often called the “sell supply” of the crypto. If the trend continues and the reserve keeps on going up, the near term outlook may be bearish for the price of the coin.

ETH Price

At the time of writing, Ethereum’s price floats around $3k, down 6% in the last seven days. Over the past month, the coin has parted with 8% in value.

The below chart shows the trend in the price of the crypto over the last five days.

The price of ETH seems to have dipped down over the past twenty-four hours | Source: ETHUSD on TradingView

Ethereum’s price had surged up to almost $3.2k a couple of days back, but has since come back down a bit to the current levels. At the moment, it’s unclear when the coin may show further recovery.

Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.