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Ether Exchange NetFlow Highlights Behavioral Patterns of ETH Whales

Ether (ETH) exchange netflows over the past few years have highlighted a pattern of Ether whale behavior that market analysts believe was done to boost the price of the second largest cryptocurrency.

“Exchange Net Flow” is a metric that measures the net amount of cryptocurrency entering and leaving the wallets of all centralized exchanges. The metric value is simply calculated by taking the difference between the exchange’s inflow and outflow.

data One of the pseudonymous traders at crypto analytics firm Cryptoquant showed that ETH whales consistently sent their holdings to exchanges in order to raise the price of ETH and sell it at a higher market price. increase.

Netflow data from the Ethereum exchange confirms the ETH whale behavior pattern and shows it has continued since 2020. Following a price increase, whales often sell their holdings at higher market prices. The price increase is then followed by a correction, as shown in the chart below.

ETH price movement relative to exchange inflows. sourceCryptoQuant

The pattern of behavior came as a surprise, as traders almost always send their holdings to exchanges for sale, so an increase in the number of deposits on centralized exchanges is often seen as a bearish signal.

Traders noted in their analysis that Ethereum exchange deposits regularly increased during short-term or long-term lows in the asset. Ethereum’s netflow chart confirms that forex flow spikes occurred frequently when the price of ETH was trading at lower levels.

Related: Ethereum Merge spikes block creation with faster average block time

Large deposits on Ethereum Whale exchanges continued in the run-up to the merge as the price of ETH increased prior to the significant proof-of-stake transition. Despite many market commentators claiming otherwise, the price of Ether fell after the merger, confirming a behavioral pattern related to Ether his whale exchange deposits. However, traders have concluded that exchange inflows do not necessarily increase before the price of Ethereum rises.