The Ethereum netflow graph demonstrates that the exchange flow peaks frequently occur when the price of ETH is trading at a temporary or permanent low.
Market analysts believe that the conduct of Ether whales is done to artificially inflate the price of the second-largest cryptocurrency. This behavior is highlighted by the exchange netflow of Ether (ETH) over the past couple of years.
The net amount of cryptocurrency moving into or out of all centralized exchanges’ wallets is measured by an indicator called “exchange netflow.” The value of the indicator is determined by subtracting exchange inflows from exchange outflows.
In order to drive up the price of ETH and sell it at a higher market price, ETH whales have continuously pushed their holdings onto exchanges, according to data supplied by a pseudonymous trader at the crypto analytics company CryptoQuant.
The behavior pattern among ETH whales is supported by the Ether exchange netflow statistics, which also shows that it has persisted since 2020. As shown in the chart below, the price pump is frequently followed by whales selling their holdings at a higher market price, which in turn precedes a correction.
Source: CryptoQuant
Given that traders often put their holdings onto exchanges to sell, a positive netflow or an increase in the number of deposits on centralized exchanges is sometimes considered as a bearish indication, the behavioral pattern is unexpected.
The trader’s investigation revealed that exchange deposits occasionally rose amid temporary or permanent lows for the asset. The netflow graph demonstrates that the increase in exchange flows frequently occurs when the price of ETH is trading at a lower level.
Even as the price of ETH rose in the days leading up to the Merge and the crucial switch to proof-of-stake, Ether whales continued to make substantial deposits onto exchanges. Despite multiple market analysts anticipating otherwise, the price fell after the Merge, confirming the behavior pattern linked to exchange deposits made by Ether whales. But the trader came to the conclusion that an increase in exchange inflow is not always followed by an increase in Ether pricing.
