What Impact Could Large Withdrawals Have on ETH Price?
In the last two months, around 20.8 million ETH have been taken out of centralized exchanges, a pattern reminiscent of the 2021 bullish phase. Binance has played a crucial role in this movement, representing more than 7.8 million ETH, which accounts for 33-39% of the total outflows.
Analyst Crazzyblockk from CryptoQuant proposes that these withdrawals might indicate prolonged accumulation or staking, reflecting a positive outlook among investors.
The substantial outflows from Binance underscore the platform’s ongoing impact on the crypto market, particularly in balancing Ethereum’s supply and demand dynamics.
Given Binance’s influence, supported by its 250 million worldwide users and $21.6 billion in deposits, these outflows could diminish the availability of ETH on exchanges, potentially exerting upward pressure on prices if demand remains robust.
Performance of the Ethereum Market
Ethereum has faced challenges in keeping pace with Bitcoin’s bullish trend, struggling to surpass the $4,000 resistance level despite the broader cryptocurrency market surge.
While Bitcoin has been achieving new record highs almost monthly, Ethereum’s gains have been more modest, demonstrating a 2.3% increase in the past week compared to Bitcoin’s 5%.
Even positive developments, like rumors about Deutsche Bank exploring an Ethereum-based layer-2 blockchain using ZKsync technology, have not succeeded in driving prices higher. Technical analysis indicates bearish signals, suggesting a possible price correction to $3,400.
The current lack of significant breakout potential for Ethereum highlights its difficulties in maintaining investor trust, notwithstanding the recent outflows hinting at prolonged accumulation patterns.