Ethereum [ETH] has been underperforming in comparison to Bitcoin [BTC] this year. The primary reason for this lackluster performance is the decreasing interest amidst a rise in selling activities.
However, signs suggest that the selling pressure might be easing. According to insights shared in a Quicktake report by CryptoQuant, the netflow of ETH on derivative exchanges exceeded 40,000 ETH on September 7th.
The uptick in ETH withdrawals from derivative exchanges indicates a reduction in selling pressure and a diminishing interest among traders to borrow for initiating short selling positions.
Continuation of Selling Activity in the Spot Market
While data from the derivative market indicates a more optimistic stance among Ethereum traders, a similar sentiment is not reflected in the spot market.
The Ethereum Foundation has been consistently selling ETH and recently transacted 450 ETH for $1 million worth of DAI via SpotOnChain. Over the past four days alone, the organization has divested $1.28 million worth of ETH tokens.
Metalpha, a cryptocurrency wealth management firm based in Hong Kong, has also deposited over $54 million equivalent in ETH to Binance in the last 72 hours, as reported by Lookonchain.
Despite this selling activity, the inflow of ETH to spot exchanges is on a decline. On September 8th, ETH’s exchange inflows dropped to 37,415 ETH, the lowest level since late July.
Thus, while sellers are still active, the strength of the selling momentum appears to be waning.
Analysis of Ethereum Price Movements
At the time of writing, ETH was priced at $2,319, registering a modest 0.6% gain over a 24-hour period.
The altcoin was observed trading in a descending channel on the one-day chart, with the Awesome Oscillator indicating a negative trend, suggesting that bears retain dominance.
Despite this, ETH is making attempts to break out towards an uptrend following three consecutive green candles. A successful breakout could signal a shift in momentum and the onset of a potential rally.
However, for this rally to materialize, buyers must overpower the sellers. The Relative Strength Index (RSI) at the time of reporting stood at 37, indicating a bearish phase for ETH.
The exhaustion among sellers is evident in the RSI line’s movement, striving to cross above the signal line. A confirmed crossover would present a buy signal.
Furthermore, Ethereum’s Funding Rates have turned positive, reflecting optimism among futures traders despite the prevalent bearish sentiment.