Despite the recent market recovery, Ethereum (ETH) has been showing minimal movement and is currently stuck in a consolidation phase.
As the digital currency struggles to break past a key resistance level, investors have taken advantage of the situation to accumulate more ETH.
Noteworthy Surge in Ethereum Exchange Outflows
Reports from Santiment reveal a significant increase in Ethereum withdrawals from cryptocurrency exchanges. Over a 24-hour period between February 8th and 9th, a total of 224,410 ETH tokens were moved off exchanges.
This trend continued on February 10th, with a massive outflow of 768.5k ETH. This marks the highest volume of coins withdrawn from exchanges in a single day within the last 23 months.
When exchange outflows experience a surge, it indicates that investors are actively purchasing the asset, expecting future price increases and higher market performance.
While this is a more long-term perspective, it illustrates a growing confidence in the market despite ongoing price challenges.
This positive sentiment was further reinforced by the decrease in the exchange supply ratio, hitting a yearly low.
Consequently, current ETH investors appear content with holding onto their assets for the long run, anticipating a rise in prices. Additionally, the diminishing supply of coins available for public sale suggests decreased chances of significant future sell-offs.
Impact on Ethereum Price Movement
The notable increase in outflows has had a positive impact on the price of ETH. At the time of writing, Ethereum was trading at $2716, registering a 2.84% daily increase, further extending its bullish outlook by 0.84% on a weekly basis.
Therefore, the substantial outflow of Ethereum indicates a prevailing bullish sentiment among the majority of participants.
This optimism is particularly strong among institutional investors, as evidenced by the continued positivity of the Coinbase premium index throughout the week.
Hence, institutions are actively accumulating ETH during its current accumulation phase, and the demand from the U.S. market and institutional investors could potentially drive further price gains.
Moreover, the surge in net capital inflow from large holders also supports this institutional demand.
Large holders of ETH have witnessed more capital inflows than outflows since February 5th, indicating six consecutive days of positive capital inflow.
This surge suggests that whales are purchasing more ETH tokens than they are selling, reflecting a growing confidence in the market.
Conclusively, ETH is currently experiencing strong bullish sentiment as investors persist in accumulating the cryptocurrency.
If this trend continues, Ethereum could potentially recover and surpass the $3000 mark, a level where previous attempts have faced resistance. Nevertheless, failure by buyers to maintain support could result in a decline to $2591 as sellers enter the market.