Following a brief period of instability on November 25th, Ethereum [ETH] has exhibited resilience, recording a daily increase of 1.38%.
This recovery contributes to a remarkable weekly surge of 9.85%, highlighting the current bullish momentum in the market.
However, despite these gains, a sense of caution lingers. Subtle bearish indicators persist, holding the potential to push ETH lower if broader market conditions deteriorate.
Large ETH Transfer by Whales Sparks Concerns of a Price Decline
Recent data from Lookonchain revealed that a whale wallet linked to ETH Devcon moved 5,597 ETH—equivalent to $19.45 million—into the Kraken cryptocurrency exchange.
This transfer occurred shortly after ETH briefly crossed the $3,500 mark. Such movements are often viewed as bearish since significant inflows to exchanges typically indicate intentions to sell, whether for profit-taking or due to diminishing market confidence.
CryptoCrypto’s analysis of the Exchange Netflow offers an alternative perspective on ETH’s potential trajectory.
Market Participants Aligning with Whale Activities
The Exchange Netflow, a metric tracking asset movements in and out of exchanges, serves as a crucial barometer of market sentiment.
Positive Netflow typically signals bearish sentiment as assets flow into exchanges for potential selling, while negative Netflow reflects bullish sentiment, indicating withdrawals for holding.
On November 25th, the Netflow showed a negative value, with $125.17 million exiting exchanges—a bullish sign that countered the actions of whales.
However, the Netflow has since turned positive, indicating a return of $53.96 million to exchanges.
If this trend continues, it might heighten the selling pressure on ETH, suggesting that market players are inclined towards selling rather than holding.
Ambiguity Shrouds ETH’s Next Course of Action
Currently, market sentiment remains divided. On the pessimistic side, $52 million in long positions were liquidated, reflecting substantial losses as the market went against bullish traders—a clear indicator of selling pressure.
In contrast, Open Interest peaked bullishly at $21.44 billion, marking a two-year high. This surge indicated a growing number of long derivative contracts, signaling optimism for a potential price surge.
Until these conflicting signals align, the direction of ETH’s price will continue to be uncertain.